The unit contribution must be positive. Check whether delivery capacity can support the resulting volume.
Try this with your own numbersFormula and worked example
Required volume = ceiling((fixed costs + target profit) / unit contribution)
| Input | Example |
|---|---|
| Period fixed costs | 8,000 |
| Target operating profit | 4,000 |
| Revenue per engagement | 500 |
| Variable cost per engagement | 300 |
| Calculated result | 60 sales |
Choose reliable inputs
Account for delivery time, review work and when you expect to be paid for each engagement. For this accounting practice calculation, use time sheets, engagement scopes and invoice ageing and a consistent definition of one engagement.
- Professional hours: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Software: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Review: include the portion belonging to this engagement or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
How many sales are needed beyond break-even?
The unit contribution must be positive. Check whether delivery capacity can support the resulting volume.
What if this input changes?
If period fixed costs rises by 10%, this example changes by 4 sales. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.