Break-Even Point Calculator

Find how many units you need to sell to cover your costs.

Fixed Costs

Rent, salaries, and other costs that don't change with sales volume.

Selling Price per Unit

Variable Cost per Unit

Materials, packaging, and other per-unit costs.

What is it?

This calculator finds your break-even point — the number of units you need to sell for total revenue to exactly cover total costs, before any sale contributes to profit.

Formula

Break-Even Units = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit)

Formula Explanation

Each unit sold contributes its selling price minus its variable cost toward covering fixed costs — this is called the contribution margin. Dividing total fixed costs by the per-unit contribution margin tells you exactly how many units you need to sell before fixed costs are fully covered and every additional sale becomes profit.

Example Calculation

With $50,000 in fixed costs, a $500 selling price, and $300 variable cost per unit, the contribution margin is $200. Break-even is 50,000 ÷ 200 = 250 units, or $125,000 in revenue.

How to Use

Enter your total fixed costs for the period (rent, salaries, insurance, etc.).
Enter your selling price per unit.
Enter your variable cost per unit (materials, packaging, shipping, etc.).
Read off the number of units and revenue needed to break even.

Benefits

Gives a clear, concrete sales target instead of a vague profitability goal.
Shows contribution margin, which is useful for pricing and cost-cutting decisions beyond just break-even.
Works for any product or service business with a per-unit price and cost structure.

Use Cases

Setting a minimum sales target before launching a new product.
Deciding whether a price cut is sustainable by checking the new break-even point.
Evaluating whether a business idea is viable given expected costs and pricing.

What Your Result Means

Selling fewer units than the break-even point means the business operates at a loss for that period. Selling more than the break-even point means every additional unit sold contributes its full contribution margin directly to profit.

Tips

Recalculate break-even whenever fixed costs, pricing, or variable costs change significantly.
A lower break-even point generally means a business can become profitable faster or survive a sales downturn more easily.
Use the contribution margin percentage to compare products with different price points on equal footing.

Common Mistakes

Leaving out costs that don't scale with sales volume from the fixed-cost total, understating the true break-even point.
Mixing up fixed and variable costs — costs that change with volume (like raw materials) belong in variable cost, not fixed cost.
Forgetting that break-even in units doesn't account for one-time startup investments beyond ongoing fixed costs.

FAQs

What's the difference between fixed and variable costs?

Fixed costs stay the same regardless of how much you sell (rent, salaries), while variable costs scale directly with each unit sold (materials, packaging, per-unit shipping).

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

Then you lose money on every unit sold and can never break even, no matter the volume — you'd need to raise the price or cut variable costs first.

Does break-even analysis account for taxes?

No, this is a simplified break-even model based on revenue and costs before tax — it doesn't factor in income tax or other post-profit deductions.

This is a simplified break-even model assuming constant price and per-unit costs — real businesses may see costs change at different volume levels.

Last updated: July 26, 2026