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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.

Output Schema

TableJSON Schema
NameRequiredDescriptionDefault
unitPriceNo
fixedCostsNo
breakEvenUnitsNo
expectedProfitNo
breakEvenRevenueNo
unitVariableCostNo
expectedUnitsSoldNo
marginOfSafetyUnitsNo
marginOfSafetyPercentNo
marginOfSafetyRevenueNo
unitContributionMarginNo
degreeOfOperatingLeverageNo
contributionMarginRatioPercentNo

Schema Changelog

Changes observed during successful MCP inspections.

  1. Changed1 schema field changed
    • changedOutput schema / (root)
      Previous value: -nullNew value: +{
      +  "additionalProperties": true,
      +  "properties": {
      +    "breakEvenRevenue": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "breakEvenUnits": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "contributionMarginRatioPercent": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "degreeOfOperatingLeverage": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "expectedProfit": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "expectedUnitsSold": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "fixedCosts": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "marginOfSafetyPercent": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "marginOfSafetyRevenue": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "marginOfSafetyUnits": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "unitContributionMargin": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "unitPrice": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    },
      +    "unitVariableCost": {
      +      "type": [
      +        "string",
      +        "number",
      +        "null"
      +      ]
      +    }
      +  },
      +  "type": "object"
      +}
  2. 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
  3. 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."
  4. Added

TDQS

A4.4/5.0
Behavior4/5

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

Annotations already declare readOnly, idempotent, non-destructive, and closed-world, so the safety profile is covered. The description adds real value beyond that: it discloses the numerical precision posture (ordinary floating-point, no dated rate table, not passed the full reference-test suite) and the exact formulas used, which the agent could not infer from structured fields.

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?

Front-loads the precision caveat, then behavior/formulas, then usage routing, which is a sensible order. It is somewhat long and 'Deterministic, idempotent calculation with zero external side effects' partly repeats the annotations, but most sentences carry distinct information.

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?

An output schema exists, so return values need no elaboration, and the description still notes a detailed breakdown is returned. Combined with the formulas, the optional expectedUnitsSold behavior (margin of safety and DOL only when supplied), and the precision caveat, nothing needed to call it correctly is missing.

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

Parameters3/5

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

Schema description coverage is 100%, so the schema already documents all four parameters and their constraints (e.g., unitPrice must exceed unitVariableCost). The formulas restate how inputs relate but add no syntax, format, or edge-case detail beyond the schema, so the baseline 3 applies.

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?

States a specific verb (calculate) and a precise resource set: break-even thresholds in units and revenue, contribution margin ratio, margin of safety, and degree of operating leverage. It also names the sibling it is not (billable_floor), so an agent can distinguish it without opening schemas.

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?

Gives explicit when-to-use domains (pricing strategy, manufacturing and SaaS unit economics, operational risk appraisal) and an explicit when-not with the correct alternative: 'Do not use for hourly freelance billing rate minimums; use billable_floor instead.' Routing is unambiguous.

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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