About the Break-Even calculator
The break-even point is where total revenue equals total cost, so you neither make nor lose money. This break-even calculator uses your fixed costs, price per unit and variable cost per unit to find how many units you must sell, and how much revenue that represents.
Add a target profit and it finds the sales needed to earn it. You also see the contribution margin per unit and as a ratio, and a chart of revenue against total cost so you can see where the lines cross. The working shows each step with your numbers.
How to use it
- Enter your Fixed costs for the period, such as rent, salaries and insurance.
- Enter the Price per unit you charge.
- Enter the Variable cost per unit: materials, packaging, shipping, commissions.
- Optionally enter a Target profit to see the sales needed to reach it.
- Read the units and revenue needed, and check the chart.
The formula
Contribution margin = price − variable cost
Units = (fixed costs + target profit) ÷ contribution margin, rounded up to a whole unit
Revenue needed = units × price
Contribution margin ratio = contribution margin ÷ price
- Fixed costs — costs that do not change with how much you sell
- Variable cost — cost of producing or delivering one more unit
- Target profit — set to 0 for the pure break-even point
Contribution margin, the key idea
Every unit you sell brings in its price and costs you its variable cost. What is left, the contribution margin, goes toward paying fixed costs. Once fixed costs are covered, each extra unit’s contribution is profit.
Sell at $45 with a $25 variable cost and each unit contributes $20. With $12,000 of fixed costs, you need $12,000 ÷ $20 = 600 units to break even, which is $27,000 of revenue. Want $5,000 of profit on top? You need (12,000 + 5,000) ÷ 20 = 850 units.
If the price does not exceed the variable cost, every sale loses money and there is no break-even point. The calculator flags that instead of returning a number.
Using break-even analysis for decisions
Break-even is most useful for “what if” questions. Raising the price by $5 lifts the contribution to $25 and cuts break-even to 480 units. Cutting the variable cost has the same effect. Taking on a larger lease raises fixed costs and pushes the break-even point up.
Compare the result with realistic sales. If you would need to sell far more than your market can support, rethink the price, costs or plan before committing.
Remember the model is simple: it assumes a single price, a constant variable cost and fixed costs that truly stay fixed. Real businesses often see discounts, volume pricing and step changes in costs. Run several scenarios and use the profit margin calculator to sanity-check your pricing.
Frequently asked questions
How do you calculate the break-even point?
Divide fixed costs by the contribution margin per unit (price minus variable cost). Round up, since you cannot sell part of a unit.
What is the break-even point in dollars?
Multiply the break-even units by the price, or divide fixed costs by the contribution margin ratio.
What counts as a fixed cost?
Costs that stay the same regardless of sales volume in the period, such as rent, salaries, insurance and software subscriptions.
How do I include a profit goal?
Enter it as Target profit. The calculator adds it to fixed costs and finds the units needed to cover both.
Last updated October 24, 2026. Results are estimates for education and planning — see our disclaimer.