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Ten percent off a 40 percent contribution
The list price is 80 and variable cost is 48, so contribution is 32 a unit. A 10% discount moves the price to 72 and contribution to 24. You sell 500 units today. Extra volume is 32 ÷ 24 − 1, which is 33.3%.
Selling price per unit: 25% lower
Change selling price per unit to 60 while keeping the other example values the same.
Selling price per unit: 25% higher
Change selling price per unit to 100 while keeping the other example values the same.
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Quick answer
What does the Discount break-even calculate?
How many extra units does this discount need to keep the same contribution? This calculator uses selling price per unit, variable cost per unit, discount off the list price, and current unit sales to estimate extra units a price cut must sell immediately in your browser.
With the values currently entered, the result is 33.3% — extra volume to hold contribution. It also shows extra units, units after the discount, new contribution / unit, and discounted price.
How to use the Discount break-even
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Selling price per unit
- Variable cost per unit
- Discount off the list price — entered in %
- Current unit sales — entered in units
Discount break-even formula
New price = price × (1 − discount). Extra volume % = original contribution per unit ÷ new contribution per unit − 1. Extra units = that percent × current units.
Assumptions
- The SBA glossary defines break-even analysis as the sales volume that just covers costs, using the relationship between fixed cost, variable cost, and profit. This tool holds total contribution steady after a price cut.
- Variable cost per unit stays the same. Mix, extra promotion cost, and unused capacity are left out.
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Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Discount break-even example and edge cases
A discount comes out of contribution, not out of thin air. The SBA glossary treats break-even as the sales volume that just covers costs, using variable cost and profit. This calculator asks a narrower question: how many extra units hold total contribution still after the cut.
Example: Ten percent off a 40 percent contribution
The list price is 80 and variable cost is 48, so contribution is 32 a unit. A 10% discount moves the price to 72 and contribution to 24. You sell 500 units today. Extra volume is 32 ÷ 24 − 1, which is 33.3%.
- Selling price per unit
- 80
- Variable cost per unit
- 48
- Discount off the list price
- 10 %
- Current unit sales
- 500 units
Calculated result33.3%extra volume to hold contribution
You need 166.7 extra units, or 666.7 units in total, to keep the same 16,000 of contribution. If you want the unit count that covers monthly fixed costs, open the business break-even calculator.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the extra-volume percent first. Then check extra units. That is the lift the sale has to deliver before contribution rises.
- If the new price sits on or under variable cost, more units make the hole larger. The calculator stops there.
Edge cases worth checking
The sale also needs extra ads
Add that spend in your head, or raise variable cost to cover it. This formula only replaces the contribution you gave away on the price.
You cannot make that many extra units
Then the discount is a smaller pie, not a promotion. Keep the list price or shrink the cut until the extra-unit line fits what you can actually sell and ship.
What changes the result most
Selling price per unit
Use a current amount for selling price per unit. Include fees or recurring costs that belong in the same figure.
Variable cost per unit
Use a current amount for variable cost per unit. Include fees or recurring costs that belong in the same figure.
Discount off the list price
Test a lower and higher discount off the list price. A small percentage change can move the final result more than expected.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Selling price per unit: 25% lower
60100%extra volume to hold contribution
Selling price per unit: 25% higher
10023.8%extra volume to hold contribution
Variable cost per unit: 25% higher
6066.7%extra volume to hold contribution
Common mistakes
Check selling price per unit
The SBA glossary defines break-even analysis as the sales volume that just covers costs, using the relationship between fixed cost, variable cost, and profit. This tool holds total contribution steady after a price cut. Make sure this matches the number you enter.
Keep current unit sales consistent
Variable cost per unit stays the same. Mix, extra promotion cost, and unused capacity are left out. Use the same units and time period throughout the calculation.
Do not rely on one discount break-even scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
How many extra units does this discount need to keep the same contribution?
It does not replace a quote, contract, accountant, or local employment guidance.