Break-Even Calculator
How many units you need to sell to cover fixed costs, the sales for a target profit, and the margin of safety.
Your business
Filled in with example values. Replace them with your own.
Optional
How many units to sell to make this profit in the same period.
Profit or loss at a number of units, and how far it is above break-even.
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Results update as you type.
Result
Break-even: 500 units ($12,500.00 in sales)
Break-even point
500units
- Contribution per unitPrice − variable cost
- $10.00
- Contribution marginShare of each sale left for fixed costs
- 40%
- Break-even revenueExact, before rounding to whole units
- $12,500.00
How it’s calculated
Contribution per unit
$25.00 − $15.00 = $10.00
Break-even units
$5,000.00 ÷ $10.00 = 500
How the break-even calculator works
Each sale brings in its price but also costs its variable cost. What is left, the contribution, goes towards fixed costs. The break-even point is the number of sales whose contributions add up to the fixed costs: below it the business makes a loss, above it a profit.
You can also find how many units a target profit needs, and test an expected sales volume.
The formula
Contribution = Price − Variable cost
Break-even units = Fixed costs ÷ Contribution
Break-even revenue = Fixed costs ÷ (Contribution ÷ Price)
Units for a profit = (Fixed costs + Profit) ÷ Contribution
Worked example
Fixed costs of 5,000 a month, a price of 25 and a variable cost of 15 a unit:
- Contribution: 25 − 15 = 10 a unit (40% of the price)
- Break-even: 5,000 ÷ 10 = 500 units, or 12,500 in sales
- For a profit of 2,000: (5,000 + 2,000) ÷ 10 = 700 units
- Selling 650 units makes a profit of 1,500, with a margin of safety of 150 units (23.1%)
Assumptions and limitations
- Price and variable cost per unit stay the same at every sales volume, and fixed costs stay fixed.
- Everything produced is sold, in the same period as the fixed costs.
- Taxes on profit are not included.
Frequently asked questions
What counts as a fixed cost?
Costs that stay the same whatever you sell in the period, such as rent, salaries, insurance and software subscriptions. Use the same period for everything: if fixed costs are monthly, the break-even point is units per month.
What counts as a variable cost?
Costs that come with each unit sold, such as materials, packaging, shipping and payment fees. If a fee is a percentage of the price, work out its amount per unit and include it here.
Why are the units rounded up?
You cannot sell part of a unit, and selling one fewer than the rounded-up number still leaves a small loss. The exact break-even revenue is shown as well.
What is the margin of safety?
How far sales could fall from the expected level before the business makes a loss, in units and as a share of expected sales. The larger it is, the more room there is for a slow period.
What if I sell several products?
This calculator assumes one product or an average unit. With several products at different prices, use average price and variable cost weighted by how much of each you expect to sell.