Break-Even Calculator

Find the number of units you need to sell to cover fixed costs and break even.

Fixed Costs

Price per Unit

Variable Cost per Unit

About the Break-Even Calculator

Break-even analysis answers a foundational business question: how many units must you sell before you stop losing money and start making a profit? This calculator uses your fixed costs, selling price, and variable cost per unit to find the exact break-even point in units and revenue.

How It Works

Each unit sold contributes its selling price minus its variable cost toward covering fixed costs — that difference is the "contribution margin" per unit. Dividing total fixed costs by the contribution margin per unit tells you exactly how many units are needed before fixed costs are fully covered and additional sales become pure profit.

Break-Even Units = Fixed Costs / (Price per Unit − Variable Cost per Unit); Break-Even Revenue = Break-Even Units × Price per Unit.

Worked example

Scenario: Fixed costs of $10,000, a selling price of $50 and a variable cost of $30 per unit.

Contribution margin per unit: $50 − $30 = $20.
Break-even units: $10,000 ÷ $20 = 500 units.
Break-even revenue: 500 × $50 = $25,000.

Result: 500 units, or $25,000 in sales, to cover all costs.

What break-even tells you

Break-even estimates the sales volume or revenue needed for contribution to cover fixed costs. It is a planning threshold, not a profit target. Changes in price, variable cost, product mix, or fixed expenses can move the break-even point.

Tips and common mistakes

Every unit sold beyond break-even adds its full contribution margin ($20 here) to profit.
Raising the price by $5 lowers break-even to 400 units; cutting variable cost by $5 lowers it to 400 units too.
Fixed costs should cover the same period as your sales target — monthly with monthly, yearly with yearly.

Assumptions & Limitations

Assumes fixed costs stay constant regardless of volume within the range being analyzed.
Assumes variable cost per unit and price per unit stay constant across all units sold.

Real businesses often see variable costs or prices shift at higher volumes due to bulk discounts or capacity constraints, which this simple model does not capture.
Does not account for seasonality or multiple product lines with different margins.

Frequently Asked Questions

What happens if my price is lower than my variable cost?

If price per unit is less than variable cost per unit, you lose money on every single sale regardless of volume, and there is no break-even point — the pricing or cost structure needs to change first.

Why does a higher contribution margin lower my break-even point?

A larger gap between price and variable cost means each unit sold covers more of the fixed costs, so fewer units are needed to reach the point where total contribution equals total fixed costs.

Is break-even the same as profitability?

No — break-even is the point of zero profit and zero loss; every unit sold beyond the break-even point contributes its full margin directly to profit.

What counts as a fixed cost?

Costs that don't change with volume in the short term: rent, salaries, insurance, software subscriptions.

What if the result isn't a whole number?

You can't sell part of a unit, so the calculator rounds up to the next whole unit.

Related Calculators

Profit Margin Calculator Markup Calculator Freelance Rate Calculator