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Break-Even Point Calculator

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Find exactly how many units you need to sell - and how much revenue that represents - before your business starts turning a profit.

Break-Even Point Calculator

Live
Break-even units
1,000 units
Break-even revenue
$50,000.00
Contribution margin/unit
$20.00

The formula

Contribution margin per unit = Price - Variable cost per unit Break-even units = Fixed costs / Contribution margin per unit Break-even revenue = Break-even units x Price
Example

$20,000 in monthly fixed costs, selling at $50 with $30 variable cost per unit: contribution margin = $20/unit, break-even = 20,000/20 = 1,000 units, or $50,000 in monthly revenue.

Step-by-step guide

  1. Add up your total fixed costs for the period - rent, salaries, insurance, and anything that doesn't change with sales volume.
  2. Enter your price per unit and the variable cost to produce or deliver each one.
  3. Read the break-even point in units and revenue - everything sold beyond that point contributes to profit.

Why contribution margin is the number that actually matters

Break-even analysis hinges entirely on contribution margin - how much of each sale is left over after variable costs, before fixed costs are even considered. A thin contribution margin means you need to sell a lot of units just to cover fixed costs, and profit grows slowly past break-even. A wide contribution margin reaches break-even faster and makes every additional sale past that point much more profitable. This is why raising price or cutting variable cost per unit (even slightly) can move the break-even point dramatically.

Common mistakes

Classifying a cost as fixed when it actually scales with sales (like shipping or payment processing fees) - misclassified costs throw off the entire calculation.
Assuming break-even means the business is healthy - it only means costs are covered with zero profit; a real profit target needs a units figure well above break-even.

Frequently asked questions

What counts as a fixed cost vs. a variable cost?

Fixed costs stay the same regardless of sales volume - rent, salaried staff, insurance, loan payments. Variable costs scale directly with each unit sold - materials, direct labor, packaging, and per-unit shipping.

What if my business sells multiple different products?

This calculator handles a single product or an averaged "typical" price and cost. For a multi-product business, either run the calculation per product line, or use a weighted-average contribution margin across your full product mix.

How often should I recalculate my break-even point?

Anytime a major input changes - a price change, a new fixed cost like added rent, or a shift in material or supplier costs - since all three directly move the break-even point.

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