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Break Even Calculator
Enter your fixed costs, price per unit and variable cost per unit — find the units and revenue you need to break even.
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Quick Answer
Enter your total fixed costs, the selling price per unit and the variable cost per unit. The tool finds the contribution margin (price minus variable cost), then divides fixed costs by it to get the break-even units — the quantity at which revenue exactly covers total costs and profit is zero. It rounds up to a whole unit and also shows the break-even revenue. Defaults: 1,00,000 fixed, 500 price, 300 variable cost gives 500 units.
What the Break Even Calculator Does
Break-even is the sales volume where you stop losing money but have not yet made any — revenue equals total cost. This calculator finds that point in units and in money, using the contribution-margin method from cost accounting.
The contribution margin per unit — price minus variable cost — is the engine. It is what each sale leaves over to chip away at fixed costs. Divide fixed costs by it and you have the number of sales needed to cover them.
How It Works
Enter three figures: total fixed costs, price per unit, and variable cost per unit. The defaults are 1,00,000 fixed, a 500 price and a 300 variable cost.
The tool computes the contribution margin (price minus variable cost), divides fixed costs by it, and rounds up to the next whole unit — because a fractional unit would still leave fixed costs uncovered.
It then shows the break-even revenue (units times price) and the contribution margin per unit. If the price does not exceed the variable cost, there is no break-even and it tells you so.
Methodology
- Find the contribution margin. Subtract the variable cost per unit from the selling price per unit.
- Check it is positive. If the price is not above the variable cost, every sale loses money and there is no break-even point.
- Divide fixed costs by it. Divide total fixed costs by the contribution margin per unit.
- Round up to whole units. Round the result up to the next whole unit, so fixed costs are fully covered.
- Find break-even revenue. Multiply the break-even units by the selling price.
Break-even point
Contribution margin = Price − Variable cost
Break-even units = round up( Fixed costs ÷ Contribution margin )
Break-even revenue = Break-even units × PriceWorked example
1,00,000 fixed, 500 price, 300 variable: margin = 200, break-even = 1,00,000 ÷ 200 = 500 units = 2,50,000 revenue.Rounding is always up: at a 300 margin, 1,00,000 ÷ 300 = 333.3, which rounds to 334 units, so fixed costs are fully covered rather than left a fraction short.
Assumptions
- One product, one price, one variable cost. A multi-product business needs a weighted contribution margin or a fixed sales mix.
- Price per unit and variable cost per unit stay constant at every volume — no bulk discounts, no economies of scale, no price cuts to move more stock.
- Total fixed costs are constant within the relevant range. In reality they step up once you outgrow capacity, such as adding a shift or a larger lease.
- Every unit produced is sold, so there is no unsold inventory. The model also ignores tax and the time value of money.
Technical Details
| Outputs | Break-even units, break-even revenue, contribution per unit |
|---|---|
| Inputs | Fixed costs, price per unit, variable cost per unit |
| Method | Contribution-margin (cost-volume-profit) |
| Rounding | Units rounded up to a whole number |
| Guard | Price must exceed variable cost |
| Processing | 100% in-browser |
Standards & references
- Cost-volume-profit (CVP) — The contribution-margin break-even model from managerial accounting: break-even units equal fixed costs divided by price minus variable cost.
- Contribution margin — Selling price minus variable cost per unit — the amount each sale contributes toward fixed costs first, and profit after.
Accuracy & Limitations
The formula is exact for its assumptions, but those assumptions are a simplification. Real prices and unit costs move with volume, season and negotiation, so treat the break-even point as a planning estimate rather than a guarantee.
Units are rounded up, so the reported break-even revenue sits a touch above the exact fixed-cost coverage. At 333.3 units the tool reports 334; selling 333 would still leave a sliver of fixed cost unmet.
It is a single-product model. If you sell several products, the true break-even depends on the mix you actually sell, which a one-price, one-cost calculation cannot capture.
Break-even is the zero-profit point. To hit a profit target, add that target profit to fixed costs before dividing — this tool stops at zero.
Real-World Use Cases
Price a new product
See how many units a given price needs to sell to cover its costs before you commit to it.
Sanity-check a business plan
Turn fixed costs into a concrete sales target that you and an investor can judge.
Compare pricing options
Raise the price and watch the break-even units fall — a fast way to see how much pricing power you have.
Set a sales floor
Know the minimum volume below which you are losing money each month.
When to use it — and when not to
Good for
- A single product with clear fixed costs and a steady per-unit cost
- Turning a price into a concrete unit sales target
- Quick what-if checks on a price or cost change
Not the best choice for
- Multi-product businesses with a shifting sales mix
- Costs that change with volume, such as bulk pricing or economies of scale
- Profit planning beyond zero, since it stops at break-even
For per-sale profitability use the profit margin calculator; for a target profit, add that profit to your fixed costs before you divide.
Frequently Asked Questions
What is the break-even point?
It is the sales volume at which total revenue exactly equals total cost, so profit is zero. Sell one unit more and you are in profit; one fewer and you are at a loss.
How is it calculated?
Break-even units equal your total fixed costs divided by the contribution margin per unit, where the contribution margin is the selling price minus the variable cost. The result is rounded up to a whole unit.
What is the contribution margin?
It is the price of a unit minus its variable cost — the amount each sale contributes toward covering fixed costs, and then profit once fixed costs are met. In the default example it is 200 per unit.
Why does it round up?
Because you cannot sell a fraction of a unit, and at the exact fractional figure fixed costs are not yet fully covered. If the maths gives 333.3 units, the tool reports 334 so the fixed costs are genuinely met.
What is the difference between fixed and variable costs?
Fixed costs do not change with how much you sell — rent, salaries, insurance. Variable costs scale with each unit — materials, packaging, payment fees. Break-even analysis depends on splitting your costs this way.
Why must the price be higher than the variable cost?
If the price does not exceed the variable cost, the contribution margin is zero or negative — every sale loses money and you can never cover fixed costs. The tool detects this and shows an error instead of a number.
How do I find the break-even for a profit target?
Add your target profit to the fixed costs, then divide by the contribution margin. This tool calculates the zero-profit point, so do that addition before entering the fixed-cost figure.
Does it work for a business with several products?
Not directly. It models one product with one price and one variable cost. A multi-product business has to use a weighted average contribution margin based on its sales mix.
What is break-even revenue?
It is the break-even units multiplied by the selling price — the sales value, in money, at which you cover all costs. In the default example that is 2,50,000.
Are taxes included?
No. The model works in pre-tax terms and ignores tax, interest and the time value of money. It is a costing tool, not a full profit-and-loss statement.
Does my data get uploaded?
No. Everything is computed in your browser, so your cost and price figures stay on your device.
How can I lower my break-even point?
Three levers: cut fixed costs, raise the price, or reduce the variable cost per unit. Any of these widens the contribution margin or shrinks the fixed costs to cover, so fewer units are needed.
References
This uses the standard contribution-margin break-even from managerial accounting — fixed costs divided by price minus variable cost — rounded up to whole units so fixed costs are fully covered. It is a single-product, constant-cost model, which is a planning simplification rather than a forecast.
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