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Elderberry syrup at the G648 break-even price
Guide G648 uses a fictitious syrup maker, Elderberry Emporium. Variable cost is 8.44 a bottle. Annual fixed cost is 12,682. The plan is 2,000 bottles. The target profit box stays at 0, which is how the guide prints its break-even price.
Variable cost per unit: 25% lower
Change variable cost per unit to 6.33 while keeping the other example values the same.
Variable cost per unit: 25% higher
Change variable cost per unit to 10.55 while keeping the other example values the same.
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Quick answer
What does the Minimum order price floor calculate?
What price covers variable cost and a share of fixed cost? This calculator uses variable cost per unit, fixed cost to spread, units in the plan, and target profit to estimate variable cost plus a share of fixed cost immediately in your browser.
With the values currently entered, the result is $14.78 — per unit to cover cost. It also shows variable cost, fixed cost per unit, and profit per unit.
How to use the Minimum order price floor
- 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
- Variable cost per unit
- Fixed cost to spread
- Units in the plan — entered in units
- Target profit
Minimum order price floor formula
Price floor = variable cost + (fixed cost + target profit) ÷ units. At a target profit of zero, this is the break-even price.
Assumptions
- University of Missouri Extension guide G648, revised August 2026, writes the break-even price as variable cost per unit plus total fixed cost divided by projected unit sales. The defaults are that guide’s Elderberry Emporium example: $8.44 a bottle, $12,682 of fixed cost, and 2,000 bottles, which it prints as $14.78.
- SBA writes break-even units as fixed costs divided by the price minus variable cost. This page turns that identity around and solves for the price. A target profit above zero spreads those extra dollars across the same units. For one order, put that order’s quantity in the units box and the fixed cost you want the order to carry.
Verify the inputs
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.
Writes the break-even price as variable cost per unit plus total fixed cost divided by projected unit sales. The Elderberry Emporium example uses $8.44, $12,682, and 2,000 bottles, and prints $14.78.
Break-even pointUS Small Business AdministrationScope: US small-business planning; method is generalDefines contribution margin as the difference between price and the cost to make the product, and writes the ratio as (price − variable cost) ÷ price.
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
Minimum order price floor example and edge cases
The price floor is the variable cost per unit plus a share of fixed cost. University of Missouri Extension guide G648, revised August 2026, writes that break-even price as variable cost per unit plus total fixed cost divided by the units you plan to sell.
Example: Elderberry syrup at the G648 break-even price
Guide G648 uses a fictitious syrup maker, Elderberry Emporium. Variable cost is 8.44 a bottle. Annual fixed cost is 12,682. The plan is 2,000 bottles. The target profit box stays at 0, which is how the guide prints its break-even price.
- Variable cost per unit
- 8.44
- Fixed cost to spread
- 12,682
- Units in the plan
- 2,000 units
- Target profit
- 0
Calculated result$14.78per unit to cover cost
Fixed cost per bottle is 6.34, because 12,682 divided by 2,000 is 6.341. Add the 8.44 variable cost and the floor is 14.78 a bottle. That is the price G648 prints for 2,000 units.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 14.78 first. It is 8.44 of variable cost plus 6.34 of fixed cost. At 2,000 bottles and a profit box of 0, the price covers cost and stops there.
- G648’s Table 4 keeps the same 12,682 and 8.44 and changes the unit count. At 1,500 bottles the floor is 16.89. At 2,500 bottles it is 13.51. Fewer units spread the same fixed cost further.
Edge cases worth checking
One order has to carry the whole fixed cost
Put the order quantity in the units box when that order has to carry the fixed cost. At 500 bottles, 12,682 divided by 500 is 25.36, and the floor becomes 33.80. That is the same G648 cost on a smaller count.
Rent is sitting in both cost boxes
G648 keeps rent, insurance, and salaries in fixed cost, and it leaves out anything already counted per bottle. A rent line inside the 8.44, and again inside the 12,682, counts that rent twice and lifts the floor.
What changes the result most
Variable cost per unit
Use a current amount for variable cost per unit. Include fees or recurring costs that belong in the same figure.
Fixed cost to spread
Use a current amount for fixed cost to spread. Include fees or recurring costs that belong in the same figure.
Units in the plan
Use the count you expect in real life. Round up when a partial units cannot be purchased or used.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Variable cost per unit: 25% lower
6.33$12.67per unit to cover cost
Variable cost per unit: 25% higher
10.55$16.89per unit to cover cost
Fixed cost to spread: 25% higher
15,853$16.37per unit to cover cost
Common mistakes
Check variable cost per unit
University of Missouri Extension guide G648, revised August 2026, writes the break-even price as variable cost per unit plus total fixed cost divided by projected unit sales. The defaults are that guide’s Elderberry Emporium example: $8.44 a bottle, $12,682 of fixed cost, and 2,000 bottles, which it prints as $14.78. Make sure this matches the number you enter.
Keep target profit consistent
SBA writes break-even units as fixed costs divided by the price minus variable cost. This page turns that identity around and solves for the price. A target profit above zero spreads those extra dollars across the same units. For one order, put that order’s quantity in the units box and the fixed cost you want the order to carry. Use the same units and time period throughout the calculation.
Do not rely on one minimum order price floor scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What price covers variable cost and a share of fixed cost?
It does not replace a quote, contract, accountant, or local employment guidance.