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Break-Even Calculator

Enter your fixed costs, price per unit, and variable cost per unit to find out how many units you need to sell to break even.

Break-even point

5,000 units

Break-even revenue

$125,000.00

Contribution margin

$10.00/unit (40.0%)

Every unit sold contributes $10.00 toward covering fixed costs. Once enough units are sold to cover all fixed costs, every additional unit is pure profit (before taxes).

The formula, in plain language

Break-even units = Fixed costs / (Price per unit − Variable cost per unit)

The denominator — price minus variable cost — is the contribution margin: how much each sale contributes toward paying off fixed costs before anything becomes profit.

Worked example

Suppose your fixed costs are $50,000 per period, you sell each unit for $25, and each unit costs $15 in materials and variable costs to produce:

  • Contribution margin: $25 − $15 = $10 per unit
  • Break-even units: $50,000 ÷ $10 = 5,000 units
  • Break-even revenue: 5,000 × $25 = $125,000

Selling fewer than 5,000 units means a loss; selling more means profit.

Frequently asked questions

What's the difference between fixed and variable costs?+

Fixed costs stay the same no matter how many units you sell — rent, salaries, insurance. Variable costs scale with each unit sold — materials, packaging, per-unit shipping. Break-even analysis uses this split to find the sales volume where total revenue exactly covers both.

What is contribution margin?+

It's the amount each unit sold contributes toward covering fixed costs, after variable costs are subtracted from the price: price − variable cost per unit. Once enough units are sold to cover all fixed costs, every additional unit's contribution margin becomes profit.

What if my variable cost is higher than my price?+

Then you lose money on every unit sold, regardless of volume — there's no break-even point because more sales only mean bigger losses. You'd need to either raise the price or lower the variable cost per unit before break-even analysis is meaningful.

Does this work for service businesses, not just physical products?+

Yes — 'units' can be anything you sell in discrete quantities: hours billed, subscriptions, appointments, and so on. Just make sure the price and variable cost are both measured per the same unit.

Not financial advice. This calculator is provided for general educational and informational purposes only and does not constitute financial, investment, tax, or legal advice. Results are estimates based on the assumptions you enter and may not reflect actual returns, fees, or taxes. Consult a qualified financial professional before making decisions based on this information.