Break-Even Calculator
Find how many units to sell to break even.
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Result
What is a Break-Even Calculator?
A Break-Even Calculator tells you how many units you need to sell to cover all your costs. By entering your fixed costs, variable costs per unit, and selling price per unit, this tool shows your break-even point and helps you understand your path to profitability.
How to calculate break-even manually (the formula)
Break-Even Point (units) = Fixed Costs ÷ (Selling Price Per Unit − Variable Cost Per Unit)
Contribution Margin = Selling Price − Variable Cost Per Unit
Break-Even (revenue) = Break-Even (units) × Selling Price
Example calculation
Fixed costs: $10,000 per month
Variable cost per unit: $15
Selling price per unit: $40
Contribution margin = $40 − $15 = $25
Break-even = $10,000 ÷ $25 = 400 units per month
Break-even revenue = 400 × $40 = $16,000 per month
Common mistakes
- Mistaking contribution margin for profit — Contribution margin is what remains after variable costs, but fixed costs still need to be paid. Profit only starts after crossing the break-even point.
- Forgetting semi-variable costs — Some costs are partly fixed and partly variable, like utilities with a base charge plus usage fees. Split these into fixed and variable components.
- Using annual fixed costs with monthly timeframes — Match your time period. If fixed costs are monthly, the break-even is monthly. If annual, the break-even is annual.
- Ignoring economies of scale — As production increases, variable costs per unit may decrease due to volume discounts. A single break-even point may shift as you scale.
Frequently asked questions
What is a break-even calculator?
A break-even calculator determines how many units of a product you need to sell for your total revenue to equal your total costs, meaning zero profit and zero loss.
How is the break-even point calculated?
Break-Even Point (units) = Fixed Costs ÷ (Selling Price Per Unit − Variable Cost Per Unit). The denominator is called the contribution margin per unit.
What is the difference between fixed and variable costs?
Fixed costs remain constant regardless of production volume (rent, salaries, insurance). Variable costs change with production (raw materials, packaging, shipping).
What is contribution margin?
Contribution margin is the selling price minus variable cost per unit. It represents how much each unit sold contributes toward covering fixed costs and generating profit.
Can the break-even point change over time?
Yes. Changes in fixed costs (higher rent), variable costs (more expensive materials), or selling price will all shift the break-even point. Regularly recalculating helps you stay profitable.
What is a good break-even point?
A lower break-even point is generally better because you need fewer sales to become profitable. Compare your break-even to expected sales volume — if expected sales far exceed break-even, you have a healthy margin of safety.