Calculator

Break-even Calculator

Find the sales volume and revenue needed to cover fixed and variable costs.

UNDERSTAND THE ANSWER

How is this calculated?

Price minus variable cost is the contribution margin per unit. Each sale contributes that amount toward fixed costs until profit reaches zero.

Break-even units formulaBreak-even units = Fixed costs ÷ (Price − Variable cost)

With $25,000 in fixed costs and a $45 contribution margin, the business needs to sell 556 units to break even.

COMMON QUESTIONS

What counts as fixed cost?

Costs that do not change directly with sales volume, such as base rent, salaries and software subscriptions.

What if variable cost is higher than price?

There is no achievable break-even point because each additional sale increases the loss.

What is a break-even point?

It is the sales volume where total contribution equals fixed costs and operating profit is zero.

What is contribution margin?

Selling price minus variable cost per unit. It can also be expressed as a percentage of price.

Why are break-even units rounded up?

Selling less than the exact threshold leaves some fixed cost uncovered, so whole-unit planning requires rounding upward.

Can a business have multiple break-even points?

Yes when prices, product mix, capacity or cost behavior changes across volume ranges.

How can I lower break-even volume?

Reduce fixed costs, increase price or reduce variable cost without causing an offsetting fall in demand.