Work & business
Calculation method and formula
round up(Fixed costs ÷ (Selling price per unit − Variable cost per unit))
Understand the inputs
- Fixed costs
- Use a measured value or your own assumption.
- Selling price per unit
- Use a measured value or your own assumption.
- Variable cost per unit
- Use a measured value or your own assumption.
Assumptions and limitations
Units are rounded up to whole items. Selling price must exceed variable unit cost; otherwise extra production cannot cover fixed costs in this model.
The formula uses the specified units. Displayed numbers are rounded; whole packs, item counts and full time periods may also be rounded within the calculation.