Break-Even Calculator
Enter your fixed costs, price per unit and variable cost per unit to find the point where sales exactly cover costs.
The break-even point in units equals total fixed costs divided by the contribution margin — the selling price per unit minus the variable cost per unit. Multiply that unit figure by the price to get break-even revenue. Below this point you lose money; above it, each sale adds profit.
How to Use This Calculator
Enter your total fixed costs — the expenses that stay the same no matter how much you sell, such as rent, insurance, salaried staff and equipment. Then enter the price you charge for one unit and the variable cost of producing or delivering that one unit, such as materials, packaging and per-sale fees.
The calculator returns two numbers: the number of units you must sell to break even, and the sales revenue that represents. Anything beyond that point is profit.
How the Calculation Works
Each unit you sell contributes its price minus its variable cost toward covering fixed costs. That figure is the contribution margin. Dividing total fixed costs by the contribution margin tells you how many units it takes for those contributions to add up to the fixed costs exactly.
At that point, total revenue equals total cost and profit is zero. The calculation only works when the price is higher than the variable cost — otherwise each sale loses money and there is no break-even point.
break-even units = fixed costs ÷ (price − variable cost)
Worked Example
Imagine fixed costs of $12,000, a selling price of $40 per unit and a variable cost of $25 per unit. The contribution margin is 40 − 25 = $15 per unit.
Divide the fixed costs by that margin: 12,000 ÷ 15 = 800 units. At $40 each, break-even revenue is 800 × 40 = $32,000. Sell more than 800 units and every extra unit adds $15 of profit.
What the Result Means
The break-even point is the sales target that turns a loss into a profit. Below it you are subsidizing the business; above it you earn $15 — the contribution margin — on every additional unit in this example.
Use it to test pricing and cost changes: raising the price or cutting the variable cost lifts the contribution margin and lowers the number of units you need. Cutting fixed costs lowers the target directly.
Assumptions and Limitations
- Assumes price and variable cost per unit stay constant across all units sold
- Requires the price to exceed the variable cost, or there is no break-even point
- Treats all fixed costs as truly fixed within the sales range considered
- Ignores taxes, financing and timing of cash flow — it is a contribution-margin model
When to Use a Break-Even Calculator
Founders, small-business owners, and product managers use this to find how many units they must sell to cover fixed and variable costs. Run it before launching a product, setting a price, or writing a business plan to see the sales volume where you stop losing money and start turning a profit. It is a fast reality check on whether a pricing or cost assumption actually holds up.
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Open calculator →Frequently Asked Questions
What is the contribution margin?
It is the selling price of one unit minus its variable cost. This is the amount each sale contributes toward covering fixed costs, and once fixed costs are covered, toward profit.
What happens if variable cost is higher than price?
Then every unit sold loses money and there is no break-even point — selling more only increases the loss. You must raise the price or cut the variable cost before a break-even point exists.
How do I lower my break-even point?
Raise the price, reduce the variable cost per unit, or cut fixed costs. Each widens the gap between revenue and cost so fewer units are needed to cover the fixed costs.
What is break-even revenue?
It is the sales value at the break-even point — the break-even units multiplied by the price per unit. In the worked example, 800 units at $40 gives $32,000 of break-even revenue.
Does the break-even point include profit?
No. Break-even is exactly zero profit — total revenue equals total cost. To include a profit target, add the desired profit to fixed costs before dividing by the contribution margin.
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