Break-Even Point Calculator

How Break-Even Point Calculator Works

The break-even point is the number of units you need to sell for your revenue to exactly cover your costs -- no profit, no loss. This calculator works out that number from your fixed costs (rent, salaries, and other costs that don't change with sales volume), your variable cost per unit (materials, packaging, and other costs that scale with each sale), and the price you charge per unit.

Formula & Method

The calculator first finds the contribution margin: price per unit − variable cost per unit -- the amount each sale contributes toward covering fixed costs after its own variable cost is paid. Break-even units are then fixed costs ÷ contribution margin, rounded up to the next whole unit (you can't sell a fraction of a unit). Break-even revenue is break-even units × price per unit, and the contribution margin ratio is (contribution margin ÷ price) × 100.

Worked Example

With fixed costs of $50,000, a variable cost of $200 per unit, and a price of $500 per unit: the contribution margin is $500 − $200 = $300 per unit. Break-even units = 50,000 ÷ 300 = 166.67, rounded up to 167 units. Break-even revenue is 167 × $500 = $83,500, and the contribution margin ratio is (300 ÷ 500) × 100 = 60%.

Frequently Asked Questions

What happens if my price is lower than my variable cost?

The calculator flags this as impossible to break even -- with a zero or negative contribution margin, every extra unit sold loses money instead of chipping away at fixed costs, no matter how many you sell.

Why does the calculator round the break-even units up?

Because you can only sell whole units. If the math works out to 166.67 units, selling 166 would leave you just short of covering fixed costs, so the calculator rounds up to 167 to guarantee you've actually broken even.

Does the break-even point include profit?

No -- break-even is strictly the point where total revenue equals total costs (profit is zero). To target a specific profit, you can add that profit figure to your fixed costs before calculating, which shifts the break-even point higher.

What counts as a fixed cost versus a variable cost?

Fixed costs stay the same regardless of how many units you sell, like rent, salaries, or insurance. Variable costs scale with each unit sold, like raw materials, packaging, or per-item shipping. The same expense can be fixed or variable depending on your business model, so it's worth double-checking which bucket each cost belongs in.