Break-Even Calculator
Find the number of units you need to sell to cover fixed costs and break even.
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.
Example
Scenario: $10,000 in fixed costs, selling at $50 per unit with $30 variable cost per unit.
Result: Contribution margin of $20 per unit means you need to sell 500 units, generating $25,000 in revenue, to break even.
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.