Break-Even Calculator
The question every new product, stall, and side business eventually faces: how many do I have to sell before I stop losing money? Enter your fixed costs, the price you charge per unit, and the variable cost of each unit — the calculator returns the break-even unit count, the revenue it represents, and the contribution margin doing the work.
Break-even point
Example: 12,000 fixed costs at a 25 price and 10 variable cost break even at 800 units.
The break-even formula
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). The bracketed term is the contribution margin: with a 25 price and 10 of variable cost, each unit contributes 15 toward the 12,000 of fixed costs, so break-even lands at 800 units — 20,000 of revenue. These figures are computed at build time by the same tested engine behind the form, so the copy can never drift from the calculator.
The contribution-margin mistake
The classic error is stuffing a share of fixed costs into the per-unit cost ("each unit really costs 18 once you count rent") and then dividing fixed costs by the shrunken margin — which counts the rent twice and inflates the break-even point. Keep the two families strictly apart: the variable-cost field takes only costs that occur because a unit was made and sold; everything that arrives regardless belongs in fixed costs. If you're unsure which side a cost belongs on, ask what happens to it in a month with zero sales.
Three levers, one point
Every way to lower a break-even point is visible in the formula: raise the price, reduce the variable cost, or cut fixed costs. The first two widen the contribution margin, and small widenings compound — which you can watch live by nudging the price field. Once you're past break-even, each additional sale drops its full contribution margin through to profit; the profit calculator picks up the story from there, and the margin calculator shows what each individual sale earns.
Frequently asked questions
What is the difference between fixed and variable costs?
Fixed costs arrive whether or not you sell anything: rent, salaries, insurance, software subscriptions. Variable costs scale with each unit: materials, packaging, payment fees, per-order shipping. The split matters because only variable costs belong in the per-unit figure — fixed costs are what the units collectively have to pay off.
What is a contribution margin?
Price per unit minus variable cost per unit — what each sale contributes toward fixed costs before any of them are covered. At a 25 price and 10 variable cost, each unit contributes 15, which is a 60% contribution ratio.
Why does the calculator reject a price at or below the variable cost?
Because break-even would never arrive: if each sale contributes nothing (or loses money), selling more only digs deeper. Rather than reporting an infinite unit count, the calculator tells you the price has to exceed the variable cost first.
How do I get break-even in revenue instead of units?
Two equivalent routes: multiply the break-even units by the price, or divide fixed costs by the contribution-margin ratio. In the example, 800 units × 25 = 20,000, the same as 12,000 ÷ 60%.
Can I build a profit target into the calculation?
Yes — treat the target like an extra fixed cost. To find the units that cover fixed costs and earn a chosen profit on top, add that profit to the fixed-costs field: the formula (fixed costs + target) ÷ contribution margin drops straight out of the same arithmetic.
Cost and price figures never leave your browser. The formula is a tested, typed function with explicit domain checks — details on the methodology page.