Break-Even Calculator
Determine exactly how many units you need to sell to cover all your costs. Enter your fixed costs, variable cost per unit, and price per unit to find your break-even point and see a visual revenue vs. cost chart.
Break-Even Point Visualization
Break-Even Units
1,000
Unit Price
$75.00
Margin/Unit
$50.00
Break-Even Units
1,000
Break-Even Revenue
$75,000.00
Contribution Margin / Unit
$50.00
Contribution Margin %
66.67%
How to use
Enter your total fixed costs (rent, salaries, equipment, etc.), the variable cost per unit (materials, labor per item), and the selling price per unit. Click calculate to see the break-even point in units and revenue, along with the contribution margin per unit.
Formula
The contribution margin is the difference between the selling price and variable cost per unit. The break-even point is reached when total revenue equals total costs (fixed + variable). Below this point you are operating at a loss; above it you are making profit.
When this calculator helps
Every business owner, startup founder, and product manager needs to know their break-even point before launching a product or service. This calculator helps you determine exactly how many units you must sell to cover all costs, turning abstract financial planning into a concrete target. Investors and lenders also frequently request break-even analysis in business plans. Whether you are pricing a new product, evaluating a business idea, or deciding whether to expand production, knowing your break-even point removes the guesswork from critical financial decisions.
Examples
Example 1: Coffee Shop
A coffee shop has $8,000/month in fixed costs (rent, utilities, staff). Each cup costs $1.50 to make and sells for $5.00. The contribution margin is $3.50 per cup, so they need to sell 2,286 cups per month (about 76 per day) to break even.
Example 2: Online Course Creator
A creator spends $5,000 on course production (fixed cost) with $2 per sale in payment processing fees (variable cost). At a $99 price point, the contribution margin is $97. They need just 52 sales to break even, everything after that is profit.
Example 3: Small Manufacturer
A candle maker has $3,000/month in fixed costs and $4.00 in materials per candle. Selling at $18, the contribution margin is $14. Break-even is 215 candles per month. By raising the price to $22, break-even drops to just 167 candles, a 22% reduction.
Things to watch
- •Include all fixed costs, do not forget insurance, software subscriptions, loan payments, and marketing expenses that recur regardless of sales volume.
- •Variable costs should include everything that scales with production: materials, shipping, payment processing fees, and any per-unit labor.
- •Run multiple scenarios, calculate break-even at different price points to find the sweet spot between volume and margin.
- •Your break-even point shifts over time as costs change, so recalculate quarterly or whenever you adjust pricing or incur new fixed expenses.
- •A low break-even point is not always better, it may mean your prices are high enough to limit demand. Balance profitability with market competitiveness.
Sources and methodology
Last reviewed: Checked during calculator QA. We review formulas, default assumptions, and examples against public references when a formal source applies.
Method: This calculator uses the formula explained on this page. We also check example results by hand to catch obvious mistakes.
Found something off? Send a correction with the page URL, inputs, result, and expected result.
Common questions
- What is a break-even point?
- The break-even point is when your total revenue equals your total costs, you're not making a profit, but you're not losing money either. It's calculated by dividing your fixed costs by the difference between your selling price and variable cost per unit.
- How can I lower my break-even point?
- You have three levers: increase your selling price, reduce your variable costs per unit, or reduce your fixed costs. Even small changes make a difference, a 10% price increase can reduce your break-even volume by much more than 10%.
- What are fixed costs vs variable costs?
- Fixed costs stay the same regardless of how many units you sell, rent, salaries, insurance, and equipment leases. Variable costs change with each unit produced, raw materials, packaging, shipping, and sales commissions. Understanding this distinction is useful for accurate break-even analysis.
- How does break-even analysis help with pricing?
- Break-even analysis shows you the minimum price you must charge to cover costs at a given sales volume. If your break-even point requires selling more units than the market demands, you need to raise prices, cut costs, or both. It makes the pricing tradeoff much easier to see.
- Can I use break-even analysis for a service business?
- Yes. Instead of units sold, think in terms of billable hours or clients served. Your fixed costs remain the same (office rent, software subscriptions), and your variable cost per service unit might include labor, supplies, or subcontractor fees. The formula works identically.