Break-Even Calculator
How many units you must sell to cover your fixed costs, and how long it takes.
The break-even point is the number of units at which revenue exactly covers costs. Below it the business loses money, above it every unit adds profit.
Enter the price, the variable cost of one unit and the fixed costs you pay whatever happens, and this calculator shows the units and revenue needed, the contribution per unit and the margin of safety.
At a glance
- What you enter
- Selling price per unit, Variable cost per unit, Fixed costs per month, Units you expect to sell per month
- What you get
- Units to break even, Revenue to break even, Profit at your expected volume, Margin of safety
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Break-Even Calculator
- 1 Enter Selling price per unit
- 2 Enter Variable cost per unit - Materials, packaging, payment fees, delivery, sales commission.
- 3 Enter Fixed costs per month - Rent, salaries, insurance, software, anything you pay whatever you sell.
- 4 Enter Units you expect to sell per month (units)
- 5 Press Calculate. You get Units to break even, Revenue to break even, Profit at your expected volume, Margin of safety, and every intermediate step stays visible under “How is this calculated?”
- 6 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $35 product with $14 of variable cost and $7,500 of fixed costs
A business comfortably above its break-even point with room for a slow month.
You enter
- Selling price per unit
- $35.00
- Variable cost per unit
- $14.00
- Fixed costs per month
- $7,500.00
- Units you expect to sell per month
- 520 units
You get
- Units to break even
- 357
- Revenue to break even
- $12,500.00
- Profit at your expected volume
- $3,420.00
- Margin of safety
- 31.3%
Each unit contributes $21, which is 60% of the price, so 357 units a month are needed to cover the $7,500 of fixed costs. That is $12,500 of revenue at break-even. Selling 520 units brings in $18,200, leaves $3,420 of profit and puts sales 163 units above break-even, a margin of safety of 31.3%. One dollar more of variable cost would move the break-even point by about 18 units.
A $12 product with $7.50 of variable cost and $1,800 of fixed costs
A high volume, low price product selling below the volume it needs.
You enter
- Selling price per unit
- $12.00
- Variable cost per unit
- $7.50
- Fixed costs per month
- $1,800.00
- Units you expect to sell per month
- 260 units
You get
- Units to break even
- 400
- Revenue to break even
- $4,800.00
- Profit at your expected volume
- -$630.00
- Margin of safety
- -53.8%
The contribution is $4.50 a unit, which is 37.5% of the price, so 400 units are needed to cover $1,800 of fixed costs, equal to $4,800 of revenue. At 260 units the revenue is $3,120 and the profit is minus $630 a month, which is 140 units short of break-even and a margin of safety of minus 53.8%. One dollar more of variable cost would raise the break-even point by about 114 units.
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Frequently asked questions
Which costs are fixed and which are variable?
A variable cost changes with every unit you sell: materials, packaging, payment fees, delivery and sales commission. A fixed cost is one you pay whatever the volume: rent, salaried staff, insurance, software and the accounting bill.
Putting a cost in the wrong place changes the answer substantially. A commission of $3 a unit left in fixed costs makes the break-even point look further away than it is, and a rent payment left in variable costs makes every unit look less profitable than it is.
What does the margin of safety tell me?
It is how far your expected sales sit above the break-even point, as a share of those sales. Selling 520 units when break-even needs 357 leaves 163 units of room, which is a margin of safety of 31.3%. Sales could fall by almost a third before the business made a loss.
Below zero the business is losing money at the volume you entered. Selling 260 units against a break-even of 400 gives a margin of safety of minus 53.8%, and the line to watch is the profit at that volume, which is minus $630 a month.
Why does a change of one dollar in the variable cost matter so much?
Because the contribution per unit is the denominator of the whole calculation. Raising the variable cost from $14 to $15 cuts the contribution from $21 to $20 and moves the break-even point from 357 units to 375, a difference of 18 units on one dollar of cost.
That sensitivity line is the reason purchasing matters more than it looks. A supplier who adds a dollar to a component moves the target every month, and a business selling close to its break-even point feels it immediately.
What if the price is below the variable cost?
Then contribution is negative or zero and the break-even point returns zero, because no volume can cover the fixed costs. Every extra sale adds to the loss rather than reducing it, and the only answers are a higher price, a lower variable cost or stopping the product.
This is worth checking before any promotion. A discount that takes the price under the variable cost turns a successful campaign into a larger loss, however good the sales figures look.
Terms used here
Short, plain-language definitions of the words this calculator uses.