Break-Even Calculator
Find how many units you need to sell to cover your costs, and the revenue at that break-even point.
This calculator runs entirely in your browser. Nothing you enter is uploaded or stored.
How to use this tool
This break even calculator tells you the point where your sales exactly cover your costs, so every unit after that turns into profit. Enter three numbers and press Calculate.
- Total fixed costs: the expenses that stay the same no matter how much you sell, such as rent, salaries, insurance, and software subscriptions for the period you are measuring.
- Selling price per unit: the price a customer pays for one unit of your product or service.
- Variable cost per unit: the cost that rises with each unit you make or sell, such as materials, packaging, payment fees, and shipping.
The tool then shows your break-even sales units, the revenue you collect at that point, and the contribution margin per unit so you can see the fixed versus variable cost margin clearly. You can copy or download the full breakdown.
The formula and how it works
The break-even point is driven by the contribution margin, which is the slice of each sale left over after the variable cost is paid. That leftover is what chips away at your fixed costs.
Break-even units = fixed costs / contribution margin per unit
Break-even revenue = break-even units x price per unit
If the price per unit is not higher than the variable cost per unit, the margin is zero or negative and there is no break-even point. In that case every sale loses money, so you would need to raise the price or cut the variable cost before the math works.
A real example
Imagine a small candle business with 12,000 dollars in fixed costs for the year. Each candle sells for 25 dollars and costs 10 dollars in wax, wicks, and packaging. The contribution margin per unit is 25 minus 10, which is 15 dollars. Dividing 12,000 by 15 gives 800 candles. So the business must sell 800 candles to break even, and at 25 dollars each that is 20,000 dollars in break-even revenue. Candle number 801 is the first one that earns real profit, adding 15 dollars to the bottom line.
Common questions
What is the break-even point in simple terms?
It is the level of sales where total revenue equals total cost, so profit is exactly zero. Sell less than that and you lose money, sell more and you start making profit. This business profitability point tool finds it for you in units and dollars.
What is the difference between fixed and variable costs?
Fixed costs stay the same regardless of how much you sell, like rent or a monthly software fee. Variable costs change with each unit, like materials and shipping. The gap between your price and your variable cost per unit is the contribution margin that pays down your fixed costs.
Why does the tool need the price to be higher than the variable cost?
Because the contribution margin per unit must be positive for a break-even point to exist. If price equals or is below variable cost, each sale fails to cover its own direct cost, so no number of units will ever cover the fixed costs.
What is the contribution margin ratio?
It is the contribution margin per unit divided by the price, shown as a percent. It tells you what share of each sale is available to cover fixed costs and create profit. A higher ratio means you reach break-even with less revenue.
Should I round up the break-even units?
In practice yes, because you cannot sell a fraction of a unit. The tool shows the exact figure, but you would typically round up to the next whole unit to be sure your costs are fully covered.
This calculator provides educational estimates only and is not professional financial or accounting advice. Real businesses carry costs and taxes this simple model does not capture. Consult a qualified professional before making business decisions.