Break-Even Calculator
Find how many units you must sell to cover fixed and variable costs, plus the revenue at your break-even point.
- Contribution margin / unit
- $20.00
- Break-even units
- 500
- Break-even revenue
- $25,000.00
Each unit contributes its price minus variable cost toward fixed costs. Selling 500 units at $50 with a $30 variable cost covers $10,000 in fixed costs — $25,000 in revenue.
How break-even works
Every unit you sell contributes its price minus its variable cost toward your fixed costs. That difference is the contribution margin. Break-even is the number of units where those contributions exactly cover fixed costs: fixed costs ÷ (price − variable cost).
With $10,000 in fixed costs, a $50 price, and a $30 variable cost, each unit contributes $20. You need 500 units — $25,000 in revenue — to break even. Sell more than that and the $20 per unit becomes profit; sell fewer and you run a loss.
Pricing the unit first? Use the markup calculator or browse all finance tools.
FAQ
How do I calculate the break-even point?▾
Divide fixed costs by the contribution margin per unit (selling price minus variable cost per unit). With $10,000 in fixed costs, a $50 price, and $30 variable cost, the margin is $20 and you break even at 500 units, or $25,000 in revenue.
What is contribution margin?▾
Contribution margin is the selling price of one unit minus its variable cost. It is the amount each sale contributes toward covering fixed costs. Once fixed costs are covered, the contribution margin on further sales becomes profit.
What is the difference between fixed and variable costs?▾
Fixed costs stay the same regardless of how much you sell — rent, salaries, software. Variable costs rise with each unit — materials, packaging, per-unit shipping, payment fees. Break-even analysis needs both split out.
Why does break-even fail when price is below variable cost?▾
If each unit sells for less than it costs to make, every sale increases your loss instead of covering fixed costs. There is no number of units that reaches break-even, so the calculator flags it instead of showing a negative result.
Does break-even include profit or taxes?▾
No. Break-even is the point where total revenue equals total cost — zero profit and zero loss. To target a profit, add the desired profit to your fixed costs before dividing by the contribution margin.