⚖️ Break-Even Calculator
Enter your fixed costs, price per unit and variable cost per unit to find the break-even point: the units and revenue needed to cover all costs.
Break-even units
400
Break-even revenue
$16,000
Contribution margin
$25
63% per unit
Break-even units = fixed costs ÷ (price − variable cost). Above this, each sale is profit. Educational, not advice. 🔒 In your browser.
How the break-even calculator works
Break-even units = fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin, the profit each unit adds toward the fixed costs. Break-even revenue is simply that unit count multiplied by the price, and it can also be found directly as fixed costs ÷ the contribution-margin ratio (the margin expressed as a fraction of price). Below the break-even point you make a loss; above it, each additional sale contributes its full margin to profit. Worked example: with $12,000 of fixed costs, a $50 price and $20 variable cost, the margin is $30, so break-even is 12,000 ÷ 30 = 400 units, or $20,000 in revenue.
If the price doesn’t exceed the variable cost, every sale loses money and there’s no break-even, the tool flags this. Educational, not financial advice.
Frequently asked questions
How do I calculate the break-even point?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With $10,000 fixed costs, a $40 price and $15 variable cost, you break even at 10,000 ÷ 25 = 400 units.
What is the contribution margin?
The price minus the variable cost per unit, the amount each sale contributes toward fixed costs and then profit. A bigger margin means fewer units to break even.
What are fixed vs variable costs?
Fixed costs (rent, salaries, equipment) don’t change with output; variable costs (materials, per-unit labour) rise with each unit made. Break-even balances the two against revenue.
What if the price is below the variable cost?
Then you lose money on every unit and can never break even. You must raise the price or cut the variable cost, the tool warns you.
Why is break-even useful?
It tells you the minimum sales to avoid a loss, helping set prices, plan production and decide whether a product or venture is viable.
How do I find break-even in revenue rather than units?
Multiply the break-even units by the price, or divide fixed costs by the contribution-margin ratio (margin ÷ price). For 400 units at $50, break-even revenue is $20,000.
How does a target profit change the calculation?
Add the desired profit to fixed costs before dividing: (fixed costs + target profit) ÷ contribution margin. To earn $6,000 profit in the example above, you would need (12,000 + 6,000) ÷ 30 = 600 units.
What break-even does not account for
It assumes price and variable cost per unit stay constant and ignores step changes in fixed costs (like hiring or new equipment) as volume grows. It is a planning snapshot, not a full financial model.
Educational information, not financial advice. These calculators use standard formulas with the figures you enter; results are illustrations, not guarantees. For decisions about your money, consult a qualified, regulated financial professional.