Calculator inputs
Enter your fixed costs, selling price per unit, and variable cost per unit to calculate the break-even point.
Costs that do not change with each unit sold, such as rent, salaries, software or insurance.
Enter the amount in the currency you are using. Keep the same currency across money fields.
The cost to produce or deliver one unit before fixed costs are included.
Formula
Break-Even Revenue = Break-Even Units x Selling Price per Unit
The break-even point is where total revenue exactly equals total costs. Below this point the business makes a loss; above it, every additional unit sold contributes to profit.
Worked examples
Fixed costs $50,000, price $25, variable cost $10: Break-even = 3,334 units, revenue = $83,350
Fixed costs $12,000, price $40, variable cost $15: Break-even = 480 units, revenue = $19,200
Fixed costs $100,000, price $200, variable cost $80: Break-even = 834 units, revenue = $166,800
How to use break-even analysis
Break-even analysis is essential for startups, product launches, and pricing decisions. It answers a fundamental question: how much do I need to sell before I start making money? Use it to set realistic sales targets, evaluate whether a new product line is viable, or understand the impact of changing your pricing or cost structure.
If you lower your variable cost per unit (through better suppliers or manufacturing efficiency), your break-even point drops. Similarly, raising the selling price reduces the number of units needed, though it may also affect demand.
Break-even calculator FAQ
What are fixed costs?
Fixed costs are expenses that stay the same regardless of how many units you produce, such as rent, insurance, salaries, and equipment leases.
What are variable costs?
Variable costs change in proportion to production volume. Examples include raw materials, packaging, shipping per unit, and sales commissions.
What if my selling price equals my variable cost?
If selling price equals variable cost, the contribution margin is zero and you can never cover fixed costs through sales alone. You would need to raise the price or lower variable costs.
Accuracy and use of results
CalculatorWorks aims to make calculations clear and practical. We use standard calculation methods where possible, explain assumptions in plain language, and encourage users to verify important results before relying on them.
How break-even analysis supports business planning
Break-even analysis helps answer a simple but critical question: how many units must be sold before revenue covers the costs of operating? It is useful before launching a product, changing prices, hiring staff, renting premises, buying equipment, or committing to advertising spend.
The key number is the contribution margin per unit, which is the selling price minus the variable cost per unit. The higher the contribution margin, the fewer units you need to sell to cover fixed costs.
Example: If fixed costs are $30,000, the selling price is $50, and variable cost is $20, each sale contributes $30 toward fixed costs. Break-even volume is 1,000 units.
Scenarios worth testing
- Raise price: increases contribution margin, but may reduce demand.
- Lower variable costs: improves break-even volume without changing customer price.
- Reduce fixed costs: lowers the sales target needed to reach break-even.
- Add discounts: may increase volume, but can make break-even harder if margin drops too far.
Use the result with margin, markup, ROI, and commission calculators to understand pricing quality from several angles.
More break-even questions
What is contribution margin?
Contribution margin is selling price minus variable cost per unit. It shows how much each sale contributes toward fixed costs and profit.
Why does the calculator round units up?
You normally cannot sell a fraction of a unit, so the practical break-even quantity is rounded up to the next whole unit.
Can a business be profitable below break-even?
Not under the cost assumptions entered. Below break-even, total contribution has not yet covered fixed costs.
What if my variable cost is higher than my price?
Every sale would lose money before fixed costs are even considered. The price, costs, or business model would need to change.