Break-Even Analysis Calculator
This break-even analysis calculator uses fixed costs, price and variable cost to find how many units you must sell to cover costs, and the revenue that takes.
What it does
The Break-Even Analysis Calculator finds the number of units you must sell before a product or business stops losing money and starts making a profit. It compares your fixed costs with the margin each sale contributes.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit); Break-even revenue = Break-even units × Price per unit
How it works
Each unit sold contributes its selling price minus its variable cost toward covering fixed costs. Dividing total fixed costs by that per-unit contribution margin gives the break-even quantity, and multiplying by price gives the break-even revenue.
Where it is used
- Deciding whether a new product or price can ever be profitable
- Setting a realistic sales target for a launch or a season
- Testing how a price rise or a cost cut moves the break-even point
Worked example
A shop has $20,000.00 in fixed costs, sells each unit for $25.00 and pays $15.00 in variable cost per unit. Each sale contributes …, so it must sell … units — … in revenue — to break even.
What break-even analysis tells you
Some costs have to be paid whether you sell one unit or a thousand; others grow with each sale. The break-even point is the sales volume at which revenue covers both. Sell one unit fewer and you make a loss; one more and you make a profit.
Enter your fixed costs, your price per unit and the variable cost of one unit, and the calculator returns the units you must sell to break even, the revenue that represents, and the contribution margin per sale. The arithmetic is the same for a market stall, a software subscription, a factory line or a freelance service, in any currency.
The formula
Each sale brings in its price, but part of it goes straight back out to pay that unit's variable cost. What is left, the contribution margin, goes toward fixed costs.
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit)
Break-even revenue = Break-even units × Price per unit
Suppose fixed costs are 20,000 a year, each unit sells for 25 and costs 15 in materials and handling. The contribution margin is 25 − 15 = 10 per unit, so you need 20,000 ÷ 10 = 2,000 units to break even, which is 50,000 in revenue. Each unit after the 2,000th adds 10 to profit.
Fixed costs versus variable costs
Fixed costs do not move with sales volume in the short term: rent or lease payments, permanent salaries, insurance, software subscriptions, accounting fees and loan repayments. Variable costs exist only because you made a sale: raw materials, the wholesale cost of goods you resell, payment processing fees, packaging, shipping and sales commission.
Some costs are partly each, such as a delivery van with a fixed lease and variable fuel, or pay that is part salary and part commission. Split these into their fixed and variable parts. Treating a semi-variable cost as entirely fixed pushes the break-even point higher than it really is.
Using the calculator
Choose a period, usually a month or a year, and enter every cost that would remain if you sold nothing as fixed costs. Enter the price a customer pays for one unit before any discount, then the variable cost of producing or delivering one unit. Compare the break-even volume with what you realistically expect to sell in the same period. Well below means a comfortable cushion; above what you can plausibly sell means the product loses money at that price.
Testing changes
A higher price widens the contribution margin and lowers the break-even volume, as long as customers still buy. A lower variable cost per unit, from a better supplier deal or different materials, has the same effect without changing the price. Lower fixed costs, such as smaller premises, reduce the break-even point directly. Try each change on its own to see which matters most; a small price rise often does more than a hard-won cost saving because it widens the margin on every sale.
Limits
The analysis assumes price and variable cost per unit stay constant, while bulk buyers want discounts and suppliers change prices. It assumes fixed costs stay fixed, though growth eventually needs more space or staff and resets the break-even point. It treats every unit as identical, so a business selling products with different margins needs a weighted analysis. And it ignores timing: you can break even over a year on paper and still run short of cash in a slow month, so pair it with a cash-flow view.
A worked example
A small coffee cart has fixed costs of 2,400 a month for pitch rent, insurance and the loan on the machine. Each coffee sells for 4 and costs 1.20 in beans, milk and a cup, a contribution margin of 2.80. Dividing 2,400 by 2.80 gives roughly 858 coffees a month, about 29 a day. At 40 a day the cart is comfortably profitable; at 20 a day the owner needs higher prices, lower costs or more customers.
About This Break-Even Analysis Calculator
Use this break-even analysis calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What is a break-even point?
How do you calculate the break-even point in units?
What is the difference between fixed and variable costs?
What is contribution margin?
Why is my break-even point so high?
Does the calculator work in any currency?
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