Finance Tools
Material Cost Break-Even Shift Calculator
Estimate how a change in material costs shifts your break-even volume and break-even revenue using fixed costs, selling price, and unit costs.
Estimate how a material cost change shifts your break-even volume and break-even revenue, based on fixed costs and unit economics.
Average realized selling price per unit.
Raw materials or input cost per unit.
Labor, overhead, logistics, and other variable costs per unit.
Enter fixed costs over the same period you care about (monthly or annual). Results use the same period.
Use negative values for cost declines.
Contribution margin
Current: $9.00
New: $7.65
Material cost per unit
Current: $9.00
New: $10.35
Break-even units
Current: 26,667
New: 31,373
Change: 4,706 units
Break-even revenue
Current: $800,000
New: $941,176
Change: $141,176
Price needed to keep original break-even (simple)
Target price per unit: $31.35
Required price increase: $1.35 (4.50%)
This holds break-even units constant (not margin). Useful for “how much price increase prevents BE volume blow-up.”
Tip: Break-even shifts are very sensitive when contribution margin is small—double-check unit cost inputs.
How it works
- Contribution margin = selling price − (material cost + other unit costs).
- Break-even units = fixed costs ÷ contribution margin.
- Break-even revenue = break-even units × selling price.
- “Target price” keeps the original break-even units after material costs change.
FAQ
Why can break-even become “Not reachable”?
If contribution margin is zero or negative, each unit doesn’t contribute to fixed costs, so break-even can’t be reached.
Should fixed costs be monthly or annual?
Either is fine—just keep the unit volume and fixed cost period consistent for interpretation.
How to use this material cost break-even shift calculator
- Enter selling price per unit, current material cost per unit, and other unit costs.
- Enter fixed costs (per month or per year).
- Enter expected material cost change (percent or amount).
- Review break-even units and break-even revenue before and after the material cost change.
Example
Selling price is $30/unit, material cost is $9/unit, other unit costs are $12/unit, and fixed costs are $240,000/year. Materials rise by 15%.
- Current contribution margin = 30 − (9 + 12) = 9
- Break-even units = 240,000 ÷ 9 = 26,667
- New material cost = 9 × 1.15 = 10.35 (new contribution margin = 7.65)
- New break-even units = 240,000 ÷ 7.65 = 31,373
More tools in Finance Tools
- Unit Cost Increase Break-Even Yield Calculator
Estimate how many additional units you must produce or sell to break even after a unit cost increase (assuming selling price stays the same).
- Price Increase vs Volume Drop Break-Even Calculator
Calculate how much sales volume can drop after a price increase while keeping total gross profit (or contribution profit) the same.
- Required Volume Increase to Offset Cost Inflation Calculator
Calculate how much sales volume must increase to offset higher input costs and maintain the same total profit when prices cannot be raised.
- Break-even Units Calculator
Calculate the number of units you need to sell to cover your fixed and variable costs.