Break-Even Point Calculator
Enter your fixed costs, your selling price and the variable cost of each unit to find how many units you must sell to cover your costs. Add a profit goal to see the sales needed to reach it.
How to use this break-even point calculator
- Add up your fixed costs for the period, such as a month or a year.
- Enter your selling price per unit.
- Enter the variable cost of each unit, including materials, packaging, shipping and fees.
- Add a target profit if you want to know the sales needed to reach it.
- Press Calculate to see the break-even units and revenue.
How to calculate the break-even point
You break even when the profit from each unit has paid off the fixed costs.
- Contribution margin per unit = price – variable cost
- Break-even units = fixed costs / contribution margin, rounded up
- Break-even revenue = break-even units x price
- Contribution margin ratio = contribution margin / price
- Units for a target profit = (fixed costs + target profit) / contribution margin
Worked example
A small business has fixed costs of $10,000 a month. It sells a product for $25 and each unit costs $10 to make and ship. The contribution margin is $15, or 60% of the price. The break-even point is 10,000 / 15 = 666.67, so you must sell 667 units, which is $16,675.00 in sales. To earn $5,000 in profit you need (10,000 + 5,000) / 15 = 1,000 units, or $25,000.00 in sales.
Use the result as a planning tool. If the break-even figure is higher than you can realistically sell, look at three levers: raise the price, cut the variable cost per unit, or trim fixed costs. Even a small change in the contribution margin moves the break-even point a lot, so test a few prices before you commit to a plan.
Assumptions & limits
- The price and the variable cost per unit stay the same however many units you sell. Discounts for volume and supplier price breaks are not modeled.
- Fixed costs are treated as constant for the period. In practice, a jump in volume can mean more staff or more space.
- The calculator handles one product. For a mix of products, use an average price and an average cost.
- Break-even is measured in units and revenue before tax. It is not the same as break-even on cash flow.
- Rounding up gives whole units, because you cannot sell part of a unit.
Frequently asked questions
How do I calculate the break-even point?
Divide your fixed costs by the contribution margin, which is price minus variable cost per unit. $10,000 divided by $15 is 667 units.
What is the contribution margin?
It is what each sale contributes toward fixed costs and profit after paying the variable cost.
What counts as a fixed cost?
Costs that do not change with sales in the short run, such as rent, insurance and salaries.
What counts as a variable cost?
Costs that rise with each unit, such as materials, packaging, shipping and payment fees.
How do I include a profit goal?
Add the target profit to the fixed costs before dividing. The calculator does this when you enter a target.
What if the price is below the variable cost?
You lose money on each sale and can never break even, so the calculator shows an error.
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Last updated: November 2026