Break-Even Calculator
Find how many units you must sell to cover fixed and variable costs.
About the Break-Even Calculator
Enter your fixed costs for a period, your selling price per unit and the variable cost of each unit. The calculator shows how many units, and how much revenue, you need before the business stops losing money, with a chart of revenue against total cost.
Every unit sold contributes its price minus its variable cost toward fixed costs such as rent, salaries and insurance. Break-even is fixed costs divided by that contribution. Above it, each unit adds its full contribution to profit.
The formula
Break-even units = fixed costs ÷ (price − variable cost)
- fixed costs
- costs that don't change with sales in the period: rent, salaries, insurance, software
- variable cost
- cost of each extra unit: materials, packaging, payment fees, shipping
- price − variable cost
- contribution margin per unit
Worked example
Fixed costs 20,000 a month, price 50, variable cost 30
- Contribution per unit: 50 − 30 = 20 (40% of price)
- Break-even = 20,000 ÷ 20 = 1,000 units, or 50,000 of revenue
- For 10,000 profit: (20,000 + 10,000) ÷ 20 = 1,500 units
Things to keep in mind
- Assumes one product, a constant price and constant unit costs. With several products, use an average contribution weighted by your sales mix.
- Fixed and variable costs must cover the same period, for example both monthly.
Questions people ask
How do I lower my break-even point?
Raise prices, cut variable costs or reduce fixed costs.
What about a profit target?
Add the target profit to fixed costs.
What is the margin of safety?
How far sales can fall before you reach break-even: (current sales − break-even sales) ÷ current sales.