The Break-Even Point Calculator

Break-even is the unit count at which contribution from sales finally covers every fixed cost. Below it each additional unit loses money; above it each one contributes its full margin to profit — which is why the number is more useful as a threshold than as a forecast.

Fixed costs for the period($)Rent, salaries, insurance, and anything else that does not move with volume.Sale price per unit($)Use realised price after discounts and fees.Variable cost per unit($)

Units to break even

3,200

Revenue needed to break even: $80,000.00
Contribution per unit: $15.00
Contribution margin ratio: 60.00%

Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.

The formula this calculator uses

Break-Even Units = Fixed Costs / (Price - Variable Cost Per Unit)

Fixed Costs: Costs that do not change with volume over the relevant range
Price: Revenue received per unit sold
Variable Cost: Cost incurred only when a unit is made or sold
Contribution Margin: Price minus variable cost — the amount each unit pays toward fixed costs

How to check the result by hand

1
Separate costs into fixed and variable
Work through every line in the period you are analysing. Split semi-variable lines into their fixed and scaled components rather than forcing them into one bucket — a misallocated line shifts the break-even point in a predictable direction.
2
Compute contribution margin per unit
Price minus variable cost per unit. In the example, $25.00 - $10.00 = $15.00. If this number is zero or negative, no volume will ever break even and the model has no answer to give.
3
Divide total fixed costs by that margin
$48,000 / $15.00 = 3,200 units. This is the volume at which cumulative contribution exactly covers overhead and nothing else.
4
Convert to revenue if units are not countable
Contribution margin ratio is $15.00 / $25.00 = 0.60, so break-even revenue is $48,000 / 0.60 = $80,000. For a service business, replace contribution per unit with contribution per billable hour.
5
Compare against realistic volume and add a margin of safety
Expected volume of 4,000 units against break-even of 3,200 leaves a 20% margin of safety: revenue can fall that far before losses start. Below roughly 10%, the plan has very little room for a slow quarter.

For worked examples, common mistakes and the limits of this formula, read the full How To Calculate The Break-Even Point page.