Break-Even Calculator
Determine the exact sales volume and revenue required to cover fixed and variable costs.
Financial & Business Inputs
About Break-Even Calculator
Determine the exact number of units or total sales revenue required to cover all fixed and variable operating costs.
How to Use
- Enter total fixed monthly overhead costs (rent, salaries, utilities).
- Enter selling price per unit.
- Enter variable production cost per unit.
- View break-even unit count and break-even sales revenue.
Formula
Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)
The difference between price and variable cost is the contribution margin.
Example
If fixed costs are $10,000, price is $50, and variable cost is $30, break-even requires 500 units ($25,000 revenue).
FAQs
What the Break-Even Point Actually Tells You
Selling below the break-even unit count means the business is operating at a loss; selling above it means every additional unit contributes pure profit (equal to the per-unit contribution margin), since fixed costs are already covered. The break-even point is not a target - it's the minimum threshold to stop losing money.
- •Mixing time periods - fixed costs are usually monthly, so entering an annual fixed-cost figure without converting it will inflate the required break-even units by roughly 12x.
- •Forgetting to include all variable costs per unit (materials, shipping, payment processing fees), which understates the true variable cost and makes break-even look easier to reach than it is.