Fixed and Variable Expense Split

The first step in cost management is to separate costs that move with sales (variable) from those that do not (fixed). This tool totals both groups and gives the fixed share; with revenue it also calculates the contribution margin ratio and break-even sales.

Formulas

• Total fixed costs = Fixed + Other fixed; Total variable costs = Variable + Other variable
• Total costs = Total fixed + Total variable
• Fixed share (%) = Total fixed / Total costs × 100
• Contribution margin ratio (%) = (Revenue − Total variable costs) / Revenue × 100
• Break-even sales = Total fixed costs / Contribution margin ratio

Amounts and ratios are rounded to 2 decimals, half up (HALF_UP). If revenue is 0 the contribution margin and break-even sales show 0; break-even is not computed when the contribution margin is zero or negative.

Example 1: fixed costs 40,000 + 10,000 = TRY 50,000, variable costs 20,000 + 5,000 = TRY 25,000, revenue TRY 200,000. Total costs TRY 75,000.00; fixed share 66.67%. Contribution margin ratio (200,000 − 25,000) / 200,000 = 87.50%; break-even sales 50,000 / 0.875 ≈ TRY 57,142.86.

Example 2 (amounts with decimals): fixed 12,345.67 + 3,456.01 = 15,801.68, variable 23,456.78 + 9,876.54 = 33,333.32 and revenue 150,000 give total costs of 49,135.00, a fixed share of 32.16%, a contribution margin ratio of 77.78% and break-even sales of 20,316.44.

How to read the result: A high fixed share means profit disappears quickly when sales fall (high operating leverage); a low one means the cost structure adapts to sales more easily. The contribution margin ratio is the share of each TRY 1 of sales left after variable costs to cover fixed costs and profit. Break-even sales is the revenue level at which profit is zero for the period of the costs you entered (e.g. monthly); below it you make a loss. Which items are fixed or variable depends on your business; you make that split. Read the result together with the break-even and margin of safety tools.