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Break-even and margin

breakeven_margin
Read-onlyIdempotent

Standard precision: this calculator uses ordinary floating-point arithmetic, keeps no dated table of official rates, and has not yet passed our full reference-test suite. Calculate cost-volume-profit break-even thresholds in units and revenue, contribution margin ratio, operational margin of safety, and degree of operating leverage (DOL).

Behavior: Deterministic, idempotent calculation with zero external side effects. Computes Unit Contribution Margin = unitPrice - unitVariableCost; Contribution Margin Ratio = CM / unitPrice; Break-Even Units = fixedCosts / CM; Break-Even Revenue = Break-Even Units * unitPrice. If expected units sold is provided, computes Margin of Safety = (expectedUnits - breakEvenUnits) / expectedUnits and Degree of Operating Leverage. Returns detailed breakdown.

Usage Guidelines: Use for pricing strategy, manufacturing and SaaS unit economics, and operational risk appraisal. Do not use for hourly freelance billing rate minimums; use billable_floor instead.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
unitPriceYesSelling price per individual product or service unit in currency units. Must be greater than unitVariableCost.
fixedCostsYesTotal periodic fixed operating overhead costs in currency units (rent, salaries, software). Must be positive.
unitVariableCostYesDirect variable cost incurred per unit produced or delivered in currency units. Must be non-negative.
expectedUnitsSoldNoProjected sales volume in units to evaluate operational margin of safety and operating leverage.

Schema Changelog

Changes observed during successful MCP inspections.

  1. Changed3 schema fields changed
    • removedInput schema / properties / fixedCosts / default
      Removed value: -10000
    • removedInput schema / properties / unitPrice / default
      Removed value: -50
    • removedInput schema / properties / unitVariableCost / default
      Removed value: -20
  2. Changed4 schema fields changed
    • changedInput schema / properties / expectedUnitsSold / description
      Previous value: -"Projected unit sales volume for margin of safety analysis"New value: +"Projected sales volume in units to evaluate operational margin of safety and operating leverage."
    • changedInput schema / properties / fixedCosts / description
      Previous value: -"Total fixed periodic operating costs ($)"New value: +"Total periodic fixed operating overhead costs in currency units (rent, salaries, software). Must be positive."
    • changedInput schema / properties / unitPrice / description
      Previous value: -"Selling price per unit ($)"New value: +"Selling price per individual product or service unit in currency units. Must be greater than unitVariableCost."
    • changedInput schema / properties / unitVariableCost / description
      Previous value: -"Variable cost incurred per unit ($)"New value: +"Direct variable cost incurred per unit produced or delivered in currency units. Must be non-negative."
  3. Added

TDQS

A4.9/5.0
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Beyond the annotations (readOnly, idempotent, non-destructive), the description discloses the precision caveat: ordinary floating-point arithmetic, no dated official-rate table, and not yet passed the full reference-test suite. It also explicitly states zero external side effects and provides the exact formulas used.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is well-organized into Precision, Behavior, and Usage Guidelines sections, and each sentence contributes meaningful information. The precision caveat is placed first, which slightly delays the main purpose statement, but the formula detail and routing guidance justify the length overall.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a 4-parameter calculator with no output schema, the description is complete: it covers purpose, formulas, expected behavior, precision limitations, and usage boundaries. The annotations and schema cover side-effect safety and parameter constraints, and 'Returns detailed breakdown' plus the named metrics is sufficient for correct invocation.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters5/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Even though schema coverage is 100%, the description adds real semantic value by defining the relationships between parameters: Unit Contribution Margin = unitPrice - unitVariableCost, Break-Even Units = fixedCosts / CM, and how expectedUnitsSold triggers margin-of-safety and DOL computation.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description opens with a specific verb ('Calculate') and a precise resource: cost-volume-profit break-even thresholds in units and revenue, contribution margin ratio, margin of safety, and DOL. It also distinguishes itself from the sibling billable_floor by explicitly excluding hourly freelance billing rate minimums.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

It gives explicit when-to-use contexts: pricing strategy, manufacturing and SaaS unit economics, and operational risk appraisal. It also names the alternative tool (billable_floor) for the excluded use case, leaving no ambiguity about routing.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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