Calculate exactly how many units you need to sell to break even. Enter fixed costs, variable cost per unit, and selling price to see profit at any sales volume.
enter your costs and price
Total Fixed Costs ($)
Variable Cost per Unit ($)
Selling Price per Unit ($)
Units to Break Even
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Revenue at BEP
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Contribution Margin
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Full breakdown (click to copy)
Decision Support
Check Contribution Margin against your industry
A low contribution margin means you need very high volume to break even — compare your margin % against typical ranges for your industry before committing to a price point.
Use the volume scenarios to set realistic targets
The "Profit at different volumes" table shows what happens above and below the break-even point — use it to set a genuinely achievable sales target, not just the bare minimum.
This is a per-unit model — check it still applies to your business
This calculator assumes a consistent price and variable cost per unit — a business with highly variable per-unit economics (e.g. custom services) will need a more detailed model.
➜ Next step: Once you know your break-even volume, check the overall return with the ROI Calculator, or work out how much a price increase would improve things with the Percentage Calculator.
How to Use the Break-Even Calculator
Enter fixed costs — costs that stay the same regardless of sales volume: rent, salaries, insurance, equipment depreciation, software subscriptions.
Enter variable cost per unit — costs that scale with each unit sold: materials, direct labor, packaging, shipping, payment processing fees.
Enter selling price per unit — your price to customers. Must be higher than variable cost per unit to generate any contribution margin.
Read break-even units — the minimum units you must sell to cover all costs. Below this: loss. Above this: profit.
Review profit projections — the calculator shows profit at 0.5×, 1×, 1.25×, 1.5×, and 2× break-even volume.
📊 Break-even formula: Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost). The denominator (Price − Variable Cost) is the Contribution Margin per unit — how much each sale contributes toward covering fixed costs and generating profit.
Understanding Break-Even Analysis
📊 Contribution Margin
Selling price minus variable cost per unit. If you sell at $50 and variable cost is $30, contribution margin = $20. Each unit sold contributes $20 toward fixed costs. After covering all fixed costs, each additional unit generates $20 profit.
🎯 Break-Even Point
The sales volume where total revenue equals total costs. At exactly break-even: profit = $0. Every unit sold beyond break-even generates pure contribution margin as profit (fixed costs are already covered).
📈 Margin of Safety
Actual sales minus break-even sales = margin of safety. If break-even is 500 units and you sell 700: margin of safety = 200 units (28.6%). This buffer shows how much sales can decline before you start losing money.
💰 Fixed Cost Leverage
High fixed costs create high break-even points but also high profit potential above break-even. Airlines, hotels, and software companies have high fixed costs but near-zero variable costs — once break-even is reached, additional revenue flows almost entirely to profit.
🔢 Break-Even in Revenue
Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio. Where CM Ratio = CM per unit ÷ Selling Price. Useful when selling multiple products at different prices — calculates the total revenue needed to break even across the product mix.
⚡ Sensitivity Analysis
Test how changes in price, variable cost, or fixed cost affect break-even. Raising price 10% reduces break-even volume significantly. Cutting fixed costs has a direct 1:1 impact on break-even. Variable cost reductions improve contribution margin and reduce break-even.
Break-Even for Business Decisions
Pricing decisions
Break-even analysis reveals the pricing floor — the minimum price that allows the business to survive at a given volume. It also shows the trade-off between price and volume: a higher price raises the contribution margin, reducing break-even volume; a lower price requires selling more units to break even. Before setting any price, calculate break-even at that price point to confirm it is achievable given your market size.
New product or venture evaluation
Before launching any new product, business, or service, calculate break-even. If break-even requires capturing an unrealistic market share, the venture is not viable regardless of how compelling the concept seems. Break-even analysis forces concrete thinking about fixed costs, pricing, and required volume that prevents pursuing fundamentally uneconomic ventures.
Cost reduction strategy
Break-even analysis identifies which cost reduction efforts have the greatest impact. Reducing fixed costs lowers break-even directly — every $1,000 reduction in monthly fixed costs lowers the monthly break-even by $1,000 ÷ contribution margin per unit. Reducing variable costs improves contribution margin, making each sale more profitable and reducing break-even volume simultaneously.
📊 Break-even reality check: Calculate break-even before starting any business or launching any product. If break-even requires selling more units than your realistic market allows, the business model needs redesigning before any investment is made. More businesses fail from unrealistic break-even assumptions than from any other cause.
Break-Even Formula
Break-Even Units = Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit). The denominator is the contribution margin — how much each unit sold contributes toward covering fixed costs.
Worked example
$5,000 monthly fixed costs, $12 variable cost per unit, $20 selling price: Contribution margin = 20 − 12 = $8/unit. Break-even units = 5,000 ÷ 8 = 625 units. Revenue at break-even = 625 × $20 = $12,500.
Assumption: assumes constant price and variable cost per unit at any volume — real businesses often see costs change at scale (bulk discounts, overtime labor), which this simple model doesn't capture.
Common Mistakes
Forgetting a cost category entirely
Fixed costs should include rent, salaries, insurance, and loan payments — variable costs should include materials, packaging, and per-unit shipping. Omitting a category understates your real break-even point.
Treating break-even as a target, not a floor
Break-even means zero profit — a viable business needs to sell meaningfully above break-even, not just reach it.
Assuming costs stay constant at any volume
Bulk purchasing discounts, overtime labor, and capacity constraints all change your real per-unit costs as volume scales — revisit the calculation at different volume levels, not just once.
Ignoring negative or zero contribution margin
If variable cost per unit is close to or above the selling price, no volume of sales will reach break-even — this calculator requires price to exceed variable cost for exactly this reason.
Frequently Asked Questions
What is the break-even point?
The break-even point is where total revenue equals total costs — profit is zero. Below it, you're making a loss. Above it, you're profitable. BEP (units) = Fixed Costs ÷ (Price - Variable Cost per Unit).
What is contribution margin?
Contribution Margin = Selling Price − Variable Cost per Unit. It's how much each unit sold contributes toward covering fixed costs. After fixed costs are covered, each unit sold generates profit equal to the contribution margin.
How do I use break-even analysis?
Use it before launching a product to see if it's financially viable. If the break-even quantity seems unrealistically high, either reduce fixed costs, reduce variable costs, or increase the selling price.
References
🏛️ U.S. Small Business Administration
Business planning and break-even analysis guidance — sba.gov
📄 Your own cost accounting records
For accurate fixed and variable cost figures, use your actual bookkeeping records rather than estimates.
Last updated: 15 July 2026 · Assumes constant price and variable cost per unit at any sales volume.