Break-Even Point Calculator
Enter your fixed costs, selling price per unit and variable cost per unit to find your break-even point in units and dollars.
| Break-even units (exact) | |
| Break-even revenue | |
| Contribution margin per unit | |
| Contribution margin ratio |
How to calculate the break-even point
The break-even point is the sales volume at which total revenue equals total costs, so profit is zero. Each unit you sell contributes its selling price minus its variable cost toward covering fixed costs. That difference is the contribution margin per unit. Divide total fixed costs by the contribution margin to get break-even units: Fixed costs ÷ (Price − Variable cost).
Worked example: a business has $10,000 in fixed costs, sells each unit for $50 and pays $30 in variable costs per unit. The contribution margin is 50 − 30 = $20. Break-even units are 10,000 ÷ 20 = 500 units. Break-even revenue is 500 × $50 = $25,000. You can also get revenue directly by dividing fixed costs by the contribution margin ratio: 20 ÷ 50 = 40%, and 10,000 ÷ 0.40 = $25,000.
If the result is not a whole number, the calculator rounds up, because you cannot sell a fraction of a unit and selling fewer units leaves you short of covering costs. Every unit sold beyond the break-even point adds its full contribution margin to profit.
Frequently asked questions
What are fixed costs versus variable costs?
Fixed costs stay the same regardless of how much you produce or sell, such as rent, salaries, insurance and software subscriptions. Variable costs change with each unit sold, such as materials, packaging, shipping and payment processing fees.
What if my price is lower than my variable cost?
Then every sale loses money and there is no break-even point. You would need to raise the price, reduce the variable cost per unit, or both, before the business can cover its fixed costs.
How do I lower my break-even point?
Reduce fixed costs, raise the selling price, or cut variable cost per unit. Any of these increases the contribution margin ratio or shrinks the costs it must cover, so fewer units are needed to break even.