Business
Break-even calculator
Enter your fixed costs for a period, the price per unit, and the variable cost per unit. Each sale contributes the difference toward fixed costs.
What this means
- Each sale contributes $30.00 toward $12,000.00 in fixed costs, so you break even at 400 units.
- To earn $5,000.00 profit you need 567 units.
What if
About this calculator
What this calculator does
It finds the sales volume where revenue equals total costs. Each unit sold covers its own variable cost and contributes the rest toward fixed costs.
How it is calculated
contribution per unit = price - variable cost
break-even units = fixed costs / contribution per unit, rounded up
units for a target = (fixed costs + target profit) / contribution per unit
How to read the result
Below the break-even units you lose money. Each unit above it adds the contribution per unit to profit.
Sources and method
Standard arithmetic with no outside data. The formula is shown under How it is calculated, and unit tests check worked examples, including edge cases.
This page uses arithmetic only, with no outside data.
Questions
What is a fixed cost?
A cost that stays the same whatever you sell in the period, such as rent.
What is contribution margin?
Price minus variable cost per unit. It is what each sale contributes toward fixed costs and profit.
Why round up?
You cannot sell part of a unit, and rounding down would leave you just short.
Does it include taxes?
No. It is a pre-tax operating view.