Break-Even Point Calculator
This break-even point calculator tells you exactly how many units you need to sell before your business starts making a profit. Enter your fixed costs, the selling price per unit, and the variable cost per unit, and it instantly returns the number of units required to break even and the revenue that volume generates. Knowing your break-even point is essential for pricing decisions, sales targets, and deciding whether a product or project is worth launching, because it is the moment when total revenue exactly covers total costs and every sale beyond it turns into profit.
Units to break even
Revenue at break-even
Units to break even
The break-even point is the number of units you must sell to cover your costs: fixed costs ÷ (price − variable cost per unit). If the contribution margin (price − variable cost) is zero or negative, there is no break-even point because each sale contributes nothing toward covering the fixed costs.
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How it works
The calculator uses the classic break-even formula: break-even units = fixed costs ÷ (price − variable cost per unit). The difference between the selling price and the variable cost per unit is called the contribution margin, because it is the amount each unit contributes toward covering the fixed costs. Once you have sold enough units for those contributions to add up to the total fixed costs, you have broken even; every additional unit is profit. The break-even revenue is simply the break-even units multiplied by the price. If the contribution margin is zero or negative, meaning the variable cost is equal to or higher than the price, there is no break-even point at all, because selling more units only deepens the loss.
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Preguntas frecuentes
- What is the break-even point?
- The break-even point is the level of sales at which total revenue exactly equals total costs, so the business makes neither a profit nor a loss. It is usually expressed as a number of units to sell, but it can also be shown as an amount of revenue. Below the break-even point you lose money, and above it every additional sale generates profit.
- What is the break-even formula?
- The formula is break-even units = fixed costs ÷ (price per unit − variable cost per unit). The term in the denominator, price minus variable cost, is the contribution margin: the part of each sale left over to cover fixed costs. The break-even revenue is then the break-even units multiplied by the price per unit.
- What is the difference between fixed and variable costs?
- Fixed costs stay the same no matter how many units you produce or sell, such as rent, salaries, insurance, or software subscriptions. Variable costs change with volume, such as raw materials, packaging, shipping, or sales commissions, and are counted per unit. The break-even calculation compares the fixed costs against the contribution each unit makes after paying its own variable cost.
- What is the contribution margin?
- The contribution margin is the selling price of a unit minus its variable cost. It is the amount each sale contributes toward covering the fixed costs and, once those are paid, toward profit. A higher contribution margin means you reach break-even with fewer units. If the contribution margin is zero or negative, there is no break-even point because sales never start covering the fixed costs.
- What happens if the variable cost is higher than the price?
- If the variable cost per unit equals or exceeds the selling price, the contribution margin is zero or negative and there is no break-even point. Each unit sold either adds nothing or actively loses money, so selling more only increases the loss. In that situation you need to raise the price, reduce the variable cost, or rethink the product before break-even is even possible.