The Product Formula by Unit The easiest of the calculations, it is the determination of the number of untils that need to be produced that will take you to breakeven - you made no money and lost none. Look at like a childs see-saw - where is the balance point the two ends - revenue and cost.

One of the areas this impacts is sales forecasting. It provides a baseline for sales targets of a specific period of time; a year, a quarter, a month, or week.

Topics: Unit Breakeven = Total Fixed Costs / (Price per Unit - Total Variable Costs) Total Fixed Costs: Sum of all Nonvariable Costs (rent, leases, utilities, etc.) Price per Unit: Total Revenue from Sales / Number of Units Produced Total Variable Costs: Sum of all Nonfixed Costs associated with the Unit (materials, labor, commissions, marketing, etc.)