Break-even Calculator
Enter your fixed costs, variable cost per unit, and selling price per unit to find the break-even point. See exactly how many units you must sell — and the revenue needed — before your business turns profitable.
Formula
Break-even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit) Break-even Revenue = Break-even Units × Selling Price
The break-even point is where total revenue equals total costs. Each unit sold contributes its selling price minus its variable cost toward covering fixed costs. Divide fixed costs by this contribution margin to find the number of units needed.
Worked Examples
Frequently Asked Questions
What are fixed costs?▾
Fixed costs remain constant regardless of output — rent, salaries, insurance, and equipment leases. They must be paid even if you sell zero units.
What are variable costs?▾
Variable costs change with production volume — raw materials, packaging, shipping, and sales commissions. They increase as you produce and sell more units.
What if selling price equals variable cost?▾
If the selling price equals (or is less than) the variable cost per unit, each sale contributes nothing (or loses money) toward covering fixed costs. Break-even is impossible — you need to raise prices or reduce variable costs.
How can I lower my break-even point?▾
Reduce fixed costs, lower variable costs per unit, or increase the selling price. Each of these increases the contribution margin per unit and reduces the number of units needed to break even.
What is contribution margin?▾
Contribution margin is the selling price per unit minus the variable cost per unit. It represents how much each unit sold contributes toward covering fixed costs. Once enough units are sold to cover all fixed costs, additional units generate pure profit.
How do I calculate break-even revenue?▾
Break-even revenue = break-even units × selling price per unit. Alternatively: break-even revenue = fixed costs ÷ contribution margin ratio, where the ratio is (selling price − variable cost) ÷ selling price.
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All calculations are for informational purposes only. They should not replace professional financial, tax, or legal advice. Always consult a qualified professional for decisions affecting your finances or business.