Break-Even Calculator
Find the sales volume needed to cover costs and start earning profit.
Inputs
$
$
$
$
Units needed to reach this profit
Results
Break-Even Units
333.3
Break-Even Revenue
$16,666.67
Contribution Margin
$30.00
per unit
CM Ratio
60.00%
Units for Target Profit
500.0
Revenue: $25,000.00
Formula
Break-Even Units = Fixed Costs / (Price - Variable Cost per Unit)
The contribution margin per unit (Price - Variable Cost) is the amount each sale contributes toward covering fixed costs. Divide total fixed costs by this margin to find the break-even volume.
Worked Example
Fixed Costs: $10,000 | Variable Cost: $20/unit | Price: $50/unit
Contribution Margin: $30/unit
Break-Even: 10,000 / 30 = 333.3 units
Break-Even Revenue: 333.3 × $50 = $16,667
When to Use This Calculator
Use when planning a new product, evaluating pricing strategies, or determining the minimum sales volume needed to avoid losses.
Important Assumptions
- Costs are clearly separable into fixed and variable.
- Price and costs are constant regardless of volume.
- All units produced are sold.
Common Mistakes to Avoid
- Not including all fixed costs (rent, salaries, subscriptions, etc.).
- Confusing total cost with variable cost per unit.
Frequently Asked Questions
What is contribution margin?
The amount each unit sold contributes toward covering fixed costs: Selling Price minus Variable Cost per Unit.
What if my variable cost exceeds price?
You lose money on every unit sold and cannot break even. You must either raise prices or reduce variable costs.
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Methodology: This calculator uses standard financial formulas documented above. All calculation engines are unit-tested for accuracy.View full methodology
Disclaimer: This calculator provides estimates for educational purposes only. Results do not constitute financial advice.Full disclaimer