Create a spreadsheet: To do a break-even calculation, you will construct or use a spreadsheet then turn the spreadsheet into a graph.Determine sales volume and unit price: The break-even point will change as the sales volume for this product and the unit price change.This price may change as you see where your break-even point is. Determine unit selling price: Determine the unit selling price for your product.Don't forget the cost to design the product and packaging, make the prototype, and maybe patent your product. These costs would include rent or mortgage, utilities, insurance, salaries of non-production employees, and all other costs. To determine fixed costs, add up the cost of running your factory for one month. Determine fixed costs: Fixed costs are costs to keep your business operating, even if you didn't produce any products.
For example, if you are printing books, your variable unit costs are paper, binding, and glue for one book, and the cost to put one book together. If you are making a product, you will need to know the cost of all the components that go into that product. Variable costs are those costs associated with making the product or buying it wholesale.
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