The break-even point is the level of sales at which revenue exactly covers all costs: below it you lose money, above it every extra unit adds profit. Enter your fixed costs for the period, your selling price and the variable cost of each unit, and the calculator returns the units and the revenue you must sell, along with the contribution margin that each sale makes towards fixed costs.
Break-even analysis is the fastest sanity check for a new product, a price change or a lease. If the break-even volume is more than you can realistically sell, the plan needs a higher price, lower costs or smaller fixed commitments before it needs a marketing budget.
Break-Even Calculator
Break-even is the sales volume at which total revenue equals total costs. Below it the business loses money on the period; above it every extra unit adds its full contribution margin to profit. The break-even calculator needs three inputs: fixed costs for the period, the selling price per unit and the variable cost per unit.
With fixed costs of $12,000 a month, a price of $49 and a variable cost of $21, each unit contributes $28. Dividing $12,000 by $28 gives 428.6, so the business must sell 429 units, or about $21,021 of revenue, before it makes anything at all. Enter a target profit and the calculator adds it to the fixed costs to show the volume needed to reach it. The sensitivity table underneath shows how the break-even point moves if the price is changed by 5% or 10% in either direction, which is often a more useful planning number than the point itself.
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Frequently Asked Questions
What is the break-even formula?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). The denominator is the contribution margin per unit. Break-even revenue = break-even units × price.
What are fixed and variable costs?
Fixed costs stay the same whatever you sell: rent, salaries, insurance, software subscriptions. Variable costs move with each unit: materials, packaging, payment fees, commissions.
What is the margin of safety?
How far actual or planned sales sit above the break-even point, usually as a percentage. A 30% margin of safety means sales can fall 30% before you start losing money.
