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Break-Even Calculator

Find the break-even point in units and revenue from fixed costs, selling price and variable cost per unit.

Find how many units you need to sell to cover your fixed costs, from your price and cost per unit.

Result

How to Use

  1. Enter your total fixed costs for the period (rent, salaries, insurance — costs that don't change with how many units you sell).
  2. Enter the price you sell each unit for, and the variable cost to produce or deliver one unit (materials, per-unit labor, packaging).
  3. The result shows your contribution margin, the exact break-even point, and a practical unit count rounded up.
  4. Optionally enter a target profit to see how many units you'd need to sell to hit that profit, not just break even.

Formula

Contribution margin per unit
contribution_margin = selling_price − variable_cost
Contribution margin ratio
ratio = contribution_margin ÷ selling_price × 100
Break-even units
units = fixed_costs ÷ contribution_margin
Break-even revenue
revenue = break_even_units × selling_price
Units for a target profit
units = (fixed_costs + target_profit) ÷ contribution_margin

Worked Example

$10,000 in fixed costs, a $50 selling price, and a $30 variable cost per unit.

  1. Contribution margin: $50 − $30 = $20 per unit
  2. Contribution margin ratio: $20 ÷ $50 × 100 = 40%
  3. Break-even units: $10,000 ÷ $20 = 500 units exactly
  4. Break-even revenue: 500 × $50 = $25,000

Result: Contribution margin per unit: $20.00 (40%) / Break-even units: 500 exactly (500 practical) / Break-even revenue: $25,000.00

About This Tool

What this tool does

This calculator finds the point where total revenue exactly covers total costs — the break-even point — from your fixed costs, selling price, and variable cost per unit. It also shows the contribution margin (how much each sale contributes toward fixed costs before profit begins) and, optionally, how many units you'd need to sell to hit a specific profit target.

When to use it

Use it when pricing a new product or service, deciding whether a price change is worth it, or checking how many sales you need before a venture becomes profitable.

What the result means

The exact break-even unit count is rarely a whole number — the practical count rounds that up, since a partial unit sale doesn't exist in most businesses. Break-even revenue is the total sales dollar figure at that exact break-even point.

Assumptions & limitations

This is a simplified, single-product break-even model: it assumes selling price and variable cost per unit stay constant regardless of volume, and that "fixed costs" genuinely don't change with output over the period you're analyzing — real businesses often have step-changes in fixed costs at higher volumes (e.g. needing to lease more space) that this tool can't anticipate. A selling price at or below variable cost is rejected because no sales volume, however large, could ever recover fixed costs in that case. This is an estimate for planning purposes, not financial, tax, or business advice.

Frequently Asked Questions

How do I calculate my break-even point?
Subtract your variable cost per unit from your selling price to get the contribution margin, then divide your total fixed costs by that contribution margin. A $10,000 fixed cost with a $20 contribution margin per unit breaks even at 500 units.
What is contribution margin?
It's the amount each unit sold contributes toward covering fixed costs, before any profit — selling price minus the variable cost of that one unit. Once enough units are sold to cover fixed costs entirely, every further unit's contribution margin becomes profit.
Why is the break-even unit count rounded up?
The exact math often lands on a fraction (like 55.56 units) since real sales happen in whole units — rounding down would leave you just short of actually breaking even, so the practical count always rounds up to the next whole unit.

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