Break Even Calculator
Calculate the break-even point for a product or business using fixed costs, selling price per unit, and variable cost per unit. This calculator estimates how many units you need to sell to cover costs.
Enter total fixed costs such as rent, salaries, software, or overhead.
Enter how much you charge per product, unit, or sale.
Enter the variable cost tied to each unit sold, such as materials or fulfillment.
How This Calculator Works
This calculator estimates the number of units you need to sell to cover all fixed and variable costs. It first calculates the contribution margin per unit, which is the selling price minus the variable cost. It then divides fixed costs by that margin to find the break-even point in units.
Formula
Break-Even Units = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
Example
If your fixed costs are $10,000, your selling price is $50 per unit, and your variable cost is $20 per unit, your contribution margin is $30 per unit. You would need to sell about 333.33 units to break even.
Frequently Asked Questions
What is a break-even point?
The break-even point is the level of sales where total revenue equals total costs, meaning there is no profit and no loss.
What are fixed costs?
Fixed costs are expenses that do not change based on sales volume, such as rent, salaries, subscriptions, and insurance.
What are variable costs?
Variable costs are costs that increase with each unit sold, such as materials, packaging, commissions, or shipping.
What is contribution margin?
Contribution margin is the amount left from each sale after subtracting variable cost. That amount helps cover fixed costs and then contributes to profit.
Can I use this for services too?
Yes. You can use the same concept for service businesses if you estimate a selling price per job or client and a variable cost per job or client.