Break-Even Point Calculator
Calculate how many units you need to sell to cover your costs (break-even point).
How to use the break-even point calculator
- Enter your fixed costs (costs that don't change with sales volume, e.g. rent).
- Enter the sale price per unit.
- Enter the variable cost per unit (e.g. materials or purchase price).
- The break-even point (units and revenue) updates automatically.
What is the break-even point?
The break-even point is where total revenue exactly covers total costs — neither profit nor loss. Below this point you lose money, above it you make money. The formula uses the contribution margin per unit (price minus variable cost): Break-even (units) = fixed costs ÷ (price − variable cost per unit).
Worked example: with $10,000 in fixed costs, a $50 sale price and a $30 variable cost, the contribution margin is 50 − 30 = $20 per unit. The break-even point is 10,000 ÷ 20 = 500 units, which corresponds to revenue of 500 × 50 = $25,000. Note that you divide by the contribution margin, not by the sale price — dividing by 50 gives 200 units, which forgets that every unit also costs something to produce.
Frequently asked questions
What's the difference between fixed and variable costs?
Fixed costs (e.g. rent, fixed salaries, insurance) stay the same no matter how much you sell. Variable costs (e.g. raw materials, shipping cost per unit) increase in proportion to how many units are sold.
What is contribution margin?
Contribution margin is what remains of the sale price per unit after subtracting variable costs. This amount "contributes" toward covering fixed costs — and whatever remains after fixed costs are covered is profit.
Why is break-even analysis useful?
It gives you a concrete target to work toward — you know exactly how many units need to be sold before the business starts turning a profit, and can use this to evaluate pricing, cost structure, and realistic sales goals.