Break-Even Calculator

Your break-even point is how much you must sell to cover all your costs, with no profit and no loss. Divide fixed costs by the profit each unit makes after its own costs. With $10,000 in fixed costs, a $25 cost per unit and a $50 price, you break even at 400 units, or $20,000 in sales.

Enter your fixed costs, the variable cost per unit and the selling price per unit. Fixed costs stay the same however much you sell, such as rent, salaries and insurance. Variable costs rise with each sale, such as materials, packaging and shipping. The tool shows break-even units (rounded up to a whole unit) and revenue. It also shows the contribution margin in dollars and as a percentage of the price.

The contribution margin is the key number. It is the selling price minus the variable cost, the amount each sale adds toward fixed costs. Once those are covered, every extra unit adds that much profit. If the price does not exceed the variable cost, you can never break even, and the tool tells you so.

Price has a strong effect. The table below keeps costs fixed and changes only the price. Raising the price from $50 to $60 cuts the break-even point from 400 units to 286. Dropping it to $35 raises it to 1,000. Test a few prices before you commit, and think about how demand might change.

Break-even analysis assumes costs and prices stay fixed. Real costs can shift with volume, so treat it as a planning guide. To see the margins on actual results, try the Profit Margin Calculator.