How to use Break-Even Calculator
This break-even calculator tells you how many units you must sell — or how much revenue you need — to cover your costs before you start making a profit. Enter your fixed costs, variable cost per unit and selling price to find the break-even point in units and dollars, plus the contribution margin that drives every dollar of profit beyond it. Essential for pricing, business planning and "is this worth it?" decisions.
- Enter your total fixed costs (rent, salaries, etc.).
- Enter the variable cost per unit.
- Enter the selling price per unit.
- Review the break-even point in units and revenue.
- Add a target profit to see the units needed to reach it.
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The break-even formula
Break-even units = fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin — the amount each sale contributes toward fixed costs and then profit. Once you pass the break-even point, every additional unit adds its full contribution margin to profit. Raising price or cutting variable cost lowers the break-even point sharply.
Using break-even for decisions
Break-even analysis helps set prices, evaluate whether a product is viable, and understand risk: a high break-even point relative to expected sales is a warning sign. Add a target profit to the fixed costs to find the volume needed to hit a profit goal, and test how price changes shift the whole picture.
| Price | Contribution | Break-even units |
|---|---|---|
| $10 | $4 | 2,500 |
| $12 | $6 | 1,667 |
| $16 | $10 | 1,000 |
Worked examples
Product launch
Inputs: Fixed $10,000 · var $6 · price $16
Result: 1,000 units · $16,000 revenue
With profit goal
Inputs: add $5,000 target profit
Result: 1,500 units
Glossary
- Fixed cost
- Costs that do not change with sales volume, such as rent.
- Variable cost
- Cost that scales with each unit produced or sold.
- Contribution margin
- Selling price minus variable cost — what each sale contributes to fixed costs and profit.
- Break-even point
- The sales level where total revenue equals total cost (zero profit).
Related reading
Frequently Asked Questions
Why use Break-Even Calculator?
- Calculates the exact unit volume and revenue required before the product turns a profit
- Contribution margin figure shows how each additional sale absorbs fixed costs above variable cost
- Target-profit mode solves for the sales volume needed to hit a specified net income goal
- Price sensitivity shows how a small price increase sharply lowers the break-even unit count
Common use cases
- Price a new product line by finding the minimum monthly sales volume to cover fixed costs
- Decide whether to rent additional studio or office space given the increase in fixed overhead
- Evaluate a freelance contract by setting time cost as a fixed and the quoted fee as price
- Test whether a 10% price rise reduces the break-even volume enough to justify a potential customer loss
- Find the revenue target that generates a specific profit above the break-even point
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