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Methodology

Weighted Multi-product Break-even Planner methodology

Calculate a composite break-even threshold from an explicit two-product sales mix.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Weighted Contribution Per Unit Ex Tax
weightedContributionPerUnitExTax = A contribution × A share + B contribution × B share

Where

weightedContributionPerUnitExTax
Weighted Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Weighted Price Per Unit Ex Tax
weightedPricePerUnitExTax = A price × A share + B price × B share

Where

weightedPricePerUnitExTax
Weighted Price Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Break Even Composite Units
breakEvenCompositeUnits = ceil(fixed costs / weighted contribution)

Where

fixedCostsExTax
Fixed costs (currency units/planning period, ex tax)Source: Business record
weightedContributionPerUnitExTax
Weighted Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
breakEvenCompositeUnits
Break Even Composite Units (whole composite units/planning period)Source: Calculated output
Break Even Revenue Ex Tax
breakEvenRevenueExTax = composite units × weighted price

Where

weightedPricePerUnitExTax
Weighted Price Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
breakEvenCompositeUnits
Break Even Composite Units (whole composite units/planning period)Source: Calculated output
breakEvenRevenueExTax
Break Even Revenue Ex Tax (currency units, ex tax)Source: Calculated output
Product AUnits
productAUnits = composite units × A share

Where

productAUnits
Product AUnits (product A units/planning period)Source: Calculated output
Product BUnits
productBUnits = composite units × B share

Where

productBUnits
Product BUnits (product B units/planning period)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The worked rows below come directly from the registered engine and visible default fixture.

Calculation and outputs

Example

The worked rows below come directly from the registered engine and visible default fixture.

Weighted Contribution Per Unit Ex Tax
39 currency units
Weighted Price Per Unit Ex Tax
88 currency units
Break Even Composite Units
2,565 units
Break Even Revenue Ex Tax
225,720 currency units
Product AUnits
1,539 units
Product BUnits
1,026 units

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

Composite break-even units applies the declared two-product sales mix to a weighted contribution threshold.

3. Validation and boundary checks

  • All inputs must be finite and within the visible boundaries.
  • Costs, revenue and contribution use one consistent ex-tax basis and planning period.
  • Whole-unit thresholds round upward only where the named engine formula requires it.

4. Assumptions and source classification

  • All prices, costs, demand limits and capacity values are user-supplied records or explicit scenarios.
  • Allocated costs remain visible and separate from avoidable costs.
  • The global workflow infers no market benchmark, policy threshold or future demand.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model does not forecast demand, implementation timing, service quality or strategic fit.
  • It does not replace accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the Weighted Multi-product Break-even planner and methodology.

Related reading

Guides to interpret the decision and its assumptions.

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