Break-Even Calculator
Find your break-even point in units.
- Break-Even Revenue —
- Contribution Margin per Unit —
Break-Even Formula
Break-Even Units = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit)
The denominator is your contribution margin — how much each sale contributes toward covering fixed costs after variable costs are paid.
What Each Input Means
Fixed Costs are costs that don’t change with how much you sell (rent, salaries, insurance) over the period you’re measuring.
Price per Unit is what you charge for one unit.
Variable Cost per Unit is what it costs you to produce or deliver one unit.
Worked Example
Say your fixed costs are $10,000 a month, you sell each unit for $50, and it costs $30 to produce one. Contribution margin = $50 − $30 = $20. Break-Even Units = $10,000 ÷ $20 = 500 units. Selling fewer than 500 units means a loss for the month; selling more means profit.
Frequently Asked Questions
What is a contribution margin?
It's the price per unit minus the variable cost per unit — the amount each sale contributes toward covering your fixed costs. Once enough units are sold to cover fixed costs, every further sale is profit.
What if price and variable cost are equal?
You'd never break even no matter how many units you sell, since each sale contributes nothing toward fixed costs. You'd need to raise the price or lower the variable cost per unit.
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