How this calculation works
A mixed basket earns the weighted average of its product contributions. Hold the unit mix fixed when dividing the common fixed cost by that average. The allocation is theoretical and can contain fractional units; it is not a whole-product optimization.
Weighted unit contribution = Σ(unit share × (price − variable cost)); target units = (fixed cost + target profit) / weighted contributionA worked example
With 60% tea at ₹40 contribution and 40% coffee at ₹60 contribution, the weighted contribution is ₹48 per unit. ₹4,800 of fixed cost breaks even at 100 units: 60 tea and 40 coffee.
Good to know
Constant unit mix, prices and variable costs. Production is assumed sold. No integer-bundle optimum, inventory changes, capacity constraints or stepped fixed costs.
Reference: OpenStax: multi-product break-even sensitivity (opens in a new tab) ↗
Use unit shares rather than revenue shares
A 60:40 unit mix means six units of one product for every four of another, regardless of their prices. A more expensive product can contribute a larger share of revenue than its share of units.
This calculator weights contribution per unit using those unit shares. Entering revenue percentages into the same formula would change the model and produce a misleading quantity. The input percentages must sum to 100.
Cover one common fixed cost
Each product contributes selling price minus its variable cost. The mix’s weighted contribution covers the shared fixed operating cost. To target a positive operating profit, add that target to the amount the mix must cover.
A product with negative contribution can appear in a model whose overall mix remains positive, but it raises the burden on the other products. A zero or negative overall contribution cannot cover positive fixed costs through additional sales alone.
Keep theoretical quantities separate from a selling plan
The result allocates continuous quantities in the requested mix. Fractional products can be meaningful for a theoretical threshold but cannot always be sold. Rounding each product independently changes both the mix and the achieved profit.
For an actual order plan, choose a whole-number bundle and recalculate its revenue and costs. This tool does not optimize a constrained product portfolio or account for capacity, stockouts, different demand curves or stepped fixed costs.
Test the assumptions behind contribution
The break-even calculator handles one product. This page adds a fixed unit mix and per-product allocation, making it useful when the basket itself is part of the problem rather than a renamed single-product page.
The COD and RTO order profit calculator can help inspect delivery-related losses before choosing a contribution input. Do not subtract the same cost again in the shared fixed-cost field; distinguish per-unit costs from costs for the whole period.
A few questions, answered
Are the mix shares based on revenue?
No. They are shares of units sold, and must total 100%.
Can I sell the fractional quantities shown?
The result is theoretical. An actual whole-unit bundle needs its own cost and mix check.
What if the weighted contribution is zero?
No finite positive-cost break-even can be obtained by scaling that mix; the tool asks you to revise it.