David is a Chartered Financial Analyst with over 15 years of experience in corporate finance and financial planning, specializing in business cost structures and break-even analysis.
This 4-in-1 Fixed Cost calculator helps you solve for the missing variable in your break-even analysis. Enter any three values—Fixed Costs, Price per Unit, Variable Cost per Unit, or Break-Even Quantity—and we will solve for the fourth.
Fixed Cost Calculator
Fixed Cost & Break-Even Formula
F = Q * (P – V)
Solve for Quantity (Q):
Q = F / (P – V)
Solve for Price (P):
P = (F / Q) + V
Solve for Variable Cost (V):
V = P – (F / Q)
Formula Variables
- (F) Fixed Costs: Costs that do not change with production levels (e.g., rent, salaries, loan payments).
- (P) Price per Unit: The selling price for one unit of your product.
- (V) Variable Cost per Unit: The costs directly tied to producing one unit (e.g., materials).
- (Q) Break-Even Quantity: The number of units you must sell to cover all costs.
Related Calculators
- Break Even Point Calculator
- Variable Cost Calculator
- Contribution Margin Calculator
- Profit Margin Calculator
What Are Fixed Costs?
Fixed costs are business expenses that remain the same regardless of how many goods or services a company produces. These costs are the baseline overhead of a business and must be paid even if there is zero production or sales activity. Common examples include rent for office space or a factory, monthly salaries for administrative staff, insurance premiums, and property taxes.
Understanding your fixed costs is a critical first step in financial planning and setting prices. Because these costs are predictable, they form the foundation of your budget. They are the “nut” you have to crack every month just to keep the lights on. In the context of a loan, your monthly loan payment is often treated as a new fixed cost that must be added to your total overhead.
How to Calculate Fixed Costs (Example)
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Find Your Contribution Margin per Unit (P – V)
First, determine the profit you make on a single unit. If your product sells for $120 (P) and the variable cost (materials, etc.) is $40 (V), your contribution margin is $80.
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Determine Your Break-Even Quantity (Q)
Next, identify the number of units you need to sell to cover all costs. Let’s say you know from market research that your break-even point is 1,000 units (Q).
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Calculate Total Fixed Costs (F)
Finally, use the formula F = Q * (P – V). In our example: F = 1,000 units * ($120 – $40), which equals 1,000 * $80. This tells you that your total fixed costs are $80,000.
Frequently Asked Questions (FAQ)
What is the main difference between fixed and variable costs? Fixed costs (like rent) stay the same regardless of production volume. Variable costs (like raw materials) increase in direct proportion to the number of units you produce.
Is a business loan payment a fixed cost? Yes. A standard amortizing loan has a set monthly payment, which is a predictable expense that does not change with your sales volume. It should be included in your fixed cost calculations when determining profitability.
Why is my ‘Contribution Margin’ (P – V) important? The contribution margin is the amount each sale contributes towards paying off your fixed costs. If your Price ($100) is less than your Variable Cost ($110), you have a negative contribution margin and will lose more money with every sale.
How can I use this calculator? Enter any three of the four fields to solve for the missing one. For example, if you know your Fixed Costs, Price, and Variable Costs, it will solve for the (Q) Break-Even Quantity you need to sell.