Break-Even Calculator
Calculate how many units you need to sell to cover your costs and start making a profit. Essential for pricing decisions and business planning.
Calculate Your Break-Even Point
Find out how many units you need to sell to cover costs
Rent, salaries, insurance, subscriptions, etc.
Materials, shipping, transaction fees, etc.
See how many units to hit your profit goal
Break-Even Point
334 units
$10,020 in revenue
Contribution Margin
$15.00
per unit
Margin Ratio
50%
of revenue
Fixed Costs
$5,000
per month
Profit at Target
$14,010
revenue needed
Profit at Different Sales Levels
| Units | Revenue | Costs | Profit | Margin |
|---|---|---|---|---|
| 0 | $0 | $5,000 | -$5,000 | 0% |
| 167 | $5,010 | $7,505 | -$2,495 | -49.8% |
| 251 | $7,530 | $8,765 | -$1,235 | -16.4% |
| 334(Break-even) | $10,020 | $10,010 | +$10 | 0.1% |
| 418 | $12,540 | $11,270 | +$1,270 | 10.1% |
| 501 | $15,030 | $12,515 | +$2,515 | 16.7% |
| 668 | $20,040 | $15,020 | +$5,020 | 25% |
How It Works
Contribution Margin = Price ($30) - Variable Cost ($15) = $15.00
Break-Even Units = Fixed Costs ($5,000) ÷ Contribution Margin ($15.00) = 334 units
How to Use This Calculator
Enter your monthly fixed costs - expenses that don't change based on sales volume. This includes rent, salaries, insurance, software, and other overhead costs.
Enter your selling price per unit - what customers pay for one unit of your product or service. For services, this might be a project fee or hourly rate.
Enter your variable cost per unit - expenses that occur with each sale. This includes materials, shipping, transaction fees, commissions, and packaging.
Optionally, enter a target monthly profit to see how many units you need to sell beyond break-even to hit your income goal.
Understanding Your Results
The break-even point shows the exact number of units (or revenue) needed to cover all costs. Selling more than this generates profit; selling less results in losses.
The contribution margin is what each sale contributes toward fixed costs and profit. Higher margins mean fewer sales needed to break even.
The profit analysis table shows your profit at different sales levels. Use this to set sales targets and understand the relationship between volume and profitability.
The margin ratio shows contribution margin as a percentage of price. This helps compare profitability across different products or services.
Frequently Asked Questions
What is a break-even point?
The break-even point is when your total revenue equals your total costs - you're not making a profit, but you're not losing money either. It's expressed as a number of units sold or total revenue. Any sales beyond this point generate profit.
What are fixed costs vs variable costs?
Fixed costs stay the same regardless of how much you sell (rent, salaries, insurance, software subscriptions). Variable costs change with each unit sold (materials, shipping, transaction fees, packaging). Understanding this difference is key to break-even analysis.
What is contribution margin?
Contribution margin is the amount each unit sale contributes to covering fixed costs and generating profit. It's calculated as: Price - Variable Cost Per Unit. A higher contribution margin means you need fewer sales to break even.
How can I lower my break-even point?
Three ways to lower break-even: 1) Increase prices (if the market allows), 2) Reduce variable costs per unit (better supplier deals, more efficient production), 3) Cut fixed costs (renegotiate rent, reduce subscriptions, automate tasks).
Why is break-even analysis important?
Break-even analysis helps you: set realistic sales targets, price products appropriately, evaluate business viability, plan for profitability, make informed decisions about costs and investments, and understand the impact of changes to your business model.
What's a good contribution margin?
It depends on your industry. Software and digital products often have 80-90%+ margins. Retail typically sees 30-50%. Restaurants average 60-70% on food. Compare your margin to industry benchmarks and aim to improve over time.
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