Calculate break-even with owner pay

Break-even depends on what you include. A calculation that covers materials but omits rent, software and owner pay answers a narrower question than most owners intend. Separate fixed monthly costs from costs that change with each sale before entering numbers.

Work through it

1. List the selling price per unit and the variable cost per unit. Subtract variable cost from price to obtain contribution per sale.
2. Add fixed operating costs and your planned owner pay for the period. Keep the period consistent across every input.
3. Divide those fixed costs by contribution and round required units upward. Try a second case with a lower selling price or higher variable cost.

Check your result

• Contribution is positive.
• All costs refer to the same period.
• The sales target is compared with actual capacity.