Break-even inputs
Enter selling price, variable cost per unit, fixed costs, target profit, and expected unit volume.
Business calculator
Break-Even Calculator
Find the unit volume and revenue needed to cover fixed costs from price, variable cost, target profit, and expected sales assumptions.
Updated June 5, 2026No sign-in requiredBusiness & Ecommerce calculator
Best used for
Set launch sales targets before pricing a product or service.
Calculator inputs
Change any assumption and the result updates immediately.
Contribution margin
$45.00
Price minus variable cost
Contribution margin rate
56.3%
Contribution / price
Break-even revenue
$32,000
Units times selling price
Target-profit units
512
Includes $5,000 target profit
Expected profit
$4,500
500 expected units
Safety gap
100
Expected units minus break-even units
What the break-even result means
Break-even units show how many units must be sold before profit turns positive. The expected profit estimate shows whether the sales plan clears fixed costs.
Break-even methodology
Contribution margin per unit is selling price minus variable cost per unit.
- Break-even units divide fixed costs by contribution margin per unit.
- Break-even revenue multiplies break-even units by selling price.
- Target-profit units add target profit to fixed costs before dividing by contribution margin.
Contribution margin = price - variable cost
Break-even units = fixed costs / contribution margin
Target units = (fixed costs + target profit) / contribution margin
Break-even example
A product priced at $80 with $35 variable cost and $18,000 monthly fixed costs has this break-even estimate.
Contribution margin
$45 per unit
Break-even volume
400 units
Break-even revenue
$32,000
Units for $5,000 target profit
512 units
Break-Even Analysis Made Simple
What break-even analysis tells you
Break-even analysis finds the sales level where a product or business stops losing money and starts covering its costs. Below that point you operate at a loss; above it, each additional sale begins to build profit.
It is most valuable when pricing a new product, planning a launch, or sanity-checking a business idea. Founders, product managers, and small-business owners use it to answer a basic but crucial question: how much do we need to sell just to break even?
How the formula works
The engine of break-even is contribution margin: selling price minus variable cost per unit. That margin is what each sale contributes toward covering fixed costs. Break-even units are simply fixed costs divided by the contribution margin per unit.
To plan for profit rather than just survival, add a target profit to fixed costs before dividing. The result is the number of units needed to cover all fixed costs and hit the profit you are aiming for.
Reading the result
Break-even units tell you the volume to clear before profit begins, and break-even revenue translates that into a sales-dollar target. Comparing those figures to realistic demand is the real test of whether a plan is viable.
If the break-even volume looks far above what you can plausibly sell, that is an early warning. It usually means price is too low, variable costs are too high, or fixed costs need trimming before the plan can work.
Fixed costs, variable costs, and margin
Fixed costs stay roughly the same regardless of how much you sell, such as rent, salaries, and software. Variable costs rise with each unit, such as materials, packaging, and per-sale fees. Sorting expenses correctly is what makes the analysis trustworthy.
Contribution margin sits between the two: the bigger the gap between price and variable cost, the fewer units you need to cover fixed costs. Small changes in price or variable cost can move the break-even point substantially.
Common mistakes to avoid
A frequent error is misclassifying costs, especially treating a variable cost as fixed or forgetting per-sale fees like payment processing. Either mistake distorts the contribution margin and gives a break-even number you cannot rely on.
Another is assuming a single price and cost hold at every volume. Discounts, bulk pricing, and rising costs at scale all bend the real curve, so a single-point break-even is a starting estimate rather than a guarantee.
Practical tips for using break-even
Run a few scenarios instead of one. Testing a higher price, a lower variable cost, and a leaner fixed-cost base shows which lever moves break-even the most and where your effort is best spent.
Pair break-even with a demand check. Knowing you need to sell a certain volume only helps if you also have a realistic view of whether the market will buy that much at your price.
Limitations and a note on advice
Break-even analysis is a clean snapshot of profit mechanics, but it simplifies reality. It assumes steady prices and costs and does not model seasonality, inventory limits, capacity, taxes, refunds, or the timing of cash flowing in and out.
For multi-product businesses or detailed cash planning, you will need weighted-average margins and a fuller financial model. Treat this as an educational planning tool and confirm important decisions with an accountant or advisor.
Common Uses
- Set launch sales targets before pricing a product or service.
- Compare pricing and cost scenarios.
- Estimate how much volume is needed to support fixed monthly costs.
Limitations and Assumptions
- Assumes a constant selling price and variable cost per unit.
- Does not model inventory limits, refunds, seasonality, capacity, taxes, or changing overhead.
- Real businesses may need multi-product or cash-flow analysis.
Frequently Asked Questions
What is break-even point?
The break-even point is the sales volume where total revenue covers total fixed and variable costs.
What is contribution margin?
Contribution margin is selling price minus variable cost per unit. It is the amount each sale contributes toward fixed costs and profit.
Can break-even units be impossible?
Yes. If variable cost is equal to or higher than selling price, each sale does not contribute enough to cover fixed costs.
Does this include taxes?
No. This calculator focuses on operating break-even before tax and financing effects.
How does price affect break-even volume?
A higher selling price usually increases contribution margin and lowers break-even units, assuming variable cost stays the same.
What if I sell multiple products?
This calculator is best for one product or average unit economics. Multi-product businesses need a weighted-average contribution margin.
Can break-even analysis predict cash flow?
Not fully. Break-even analysis focuses on profit mechanics and may not capture payment timing, inventory purchases, debt payments, or working capital.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
- Break-Even Analysis: how to calculate the break-even point and contribution marginCorporate Finance Institute · verified 2026-06-05
- Manage your finances — cost, pricing, and break-even guidance for small businessesU.S. Small Business Administration · verified 2026-06-05
Business disclaimer
Results are estimates for planning and analysis based on the figures you enter. They are not accounting, tax, or financial advice — verify with your own records and a qualified professional before making decisions.
Built and maintained by Calculator Matters, an independent calculator project. Method checked against published formulas and primary sources · Educational estimate, not professional advice · How we calculate · Found an error? corrections@calculatormatters.com