Break-Even Point Calculator
(Units, Revenue & Contribution Margin)
Enter fixed costs, selling price and variable cost per unit to find how many units you must sell to cover your costs.
Step 1 — Fixed & Variable Costs
Rent, salaries, insurance — costs that don't change with sales volume
What you charge the customer per unit
Materials, packaging, commission — cost that scales with each sale
Calculated Results
Enter fixed costs, price, and variable cost to calculate your break-even point.
This break-even point calculator works out how many units a business must sell to cover its costs. Enter fixed costs, the selling price and the variable cost per unit. It gives the break-even point in units and in sales revenue, the contribution margin, and the sales needed to reach a profit target.
How to Calculate the Break-Even Point
This is the formula the U.S. Small Business Administration gives.
With $5,000 of fixed costs a month, a selling price of $25 and a variable cost of $10, break-even is 5,000 ÷ 15 = 333.3. You cannot sell a third of a unit, so the answer is 334 units.
| Units sold | Revenue | Variable costs | Fixed costs | Profit or loss |
|---|---|---|---|---|
| 200 | $5,000 | $2,000 | $5,000 | −$2,000 |
| 334 | $8,350 | $3,340 | $5,000 | $10 |
| 500 | $12,500 | $5,000 | $5,000 | $2,500 |
Below 334 units every month ends in a loss. Above it, each extra unit adds $15 of profit.
Break-Even in Sales Revenue
To get the answer in money, divide fixed costs by the contribution margin ratio.
The contribution margin ratio here is 15 ÷ 25 = 60%, so break-even revenue is 5,000 ÷ 0.60 = $8,333. The calculator shows $8,350, because it rounds up to 334 whole units and multiplies by the price.
Fixed Costs and Variable Costs
The result depends on sorting costs correctly. The SBA describes fixed costs as those that do not change with the increase or decrease in production or services.
| Fixed costs | Variable costs |
|---|---|
| Rent and lease payments | Materials and stock |
| Salaries | Packaging |
| Insurance | Delivery and postage |
| Property taxes and loan interest | Sales commission and payment fees |
Some costs are a mix. The SBA calls these semi-variable: utilities, repairs and fuel stay level up to a point and then rise with output. Put the steady part in fixed costs and the part that rises with sales in the variable cost per unit.
Sales Needed for a Target Profit
To make $2,000 a month in the same business: (5,000 + 2,000) ÷ 15 = 466.7, so 467 units and $11,675 of revenue.
How Price and Cost Move the Break-Even Point
| Change | Contribution margin | Break-even units |
|---|---|---|
| No change ($25 price, $10 cost) | $15 | 334 |
| Price raised to $30 | $20 | 250 |
| Variable cost cut to $8 | $17 | 295 |
| Fixed costs cut to $4,000 | $15 | 267 |
A $5 price rise lowers the break-even point by a quarter, provided customers still buy at the new price. The Markup vs Margin Calculator and the Gross Profit Margin Calculator help with setting the price.
Limits of Break-Even Analysis
The formula assumes one product, one price and costs that behave neatly. A business with several products needs an average contribution margin weighted by how much of each it sells. Bulk discounts change the variable cost as volume grows, and fixed costs jump when a second machine or shop is needed. Treat the result as a planning figure and recalculate when prices or costs change.
How to Use the Break-Even Calculator
- Enter fixed costs: Type the costs you pay each month whatever you sell, such as rent, salaries and insurance.
- Enter the selling price: Type the price a customer pays for one unit.
- Enter variable cost per unit: Type what one more unit costs you: materials, packaging, delivery, commission.
- Add a target profit: Optional. Enter the monthly profit you want to see how many units it takes to reach it.
Frequently Asked Questions
How do I calculate the break-even point?
Divide fixed costs by the selling price minus the variable cost per unit. With $5,000 of fixed costs, a $25 price and a $10 variable cost, break-even is 5,000 ÷ (25 − 10) = 333.3, so 334 units.
How do I calculate break-even in sales revenue?
Divide fixed costs by the contribution margin ratio, which is (price − variable cost) ÷ price. $5,000 ÷ 0.60 = $8,333. The calculator rounds up to whole units first, so it shows 334 × $25 = $8,350.
What is contribution margin?
The selling price minus the variable cost of one unit. It is what each sale contributes toward fixed costs, and toward profit once those are covered. A $25 item with a $10 variable cost has a contribution margin of $15, or 60%.
What is the difference between fixed and variable costs?
Fixed costs stay the same whatever you sell in the period: rent, salaries, insurance. Variable costs rise with every unit sold: materials, packaging, delivery, sales commission.
How many units do I need to sell to make a profit?
Add the profit you want to fixed costs and divide by the contribution margin. For a $2,000 profit: (5,000 + 2,000) ÷ 15 = 466.7, so 467 units.
What if my variable cost is higher than my price?
There is no break-even point. Each sale loses money, so selling more makes the loss bigger. The price has to rise or the unit cost has to fall first.
The break-even formula and cost definitions were checked against the U.S. Small Business Administration's break-even guide in October 2026.