Break-even Point calculator

How to calculate it

Contribution per unit = selling price − variable cost per unit. Break-even units = fixed costs ÷ contribution per unit, rounded up.

Worked example

With $1,000 fixed costs, a $40 selling price, and $15 variable cost, contribution is $25 per unit. You need 40 sales to break even.

Results are estimates. Check your inputs and account for any costs not included before making financial decisions.

Match the costs to one period

If fixed costs are monthly, expected sales must also be monthly. Fixed costs include expenses incurred even with zero sales. Variable costs rise with each unit: materials, packaging and per-sale charges are common examples. Avoid counting a cost in both fields.

Why whole units are rounded up

With fixed costs of 100, a selling price of 10 and a variable cost of 7, each sale contributes 3. You need 33.333… units mathematically, but 34 whole units to cover the cost. Revenue at that whole-unit threshold is 340, with a profit of 2.

When the model stops being useful

If price equals variable cost, sales contribute nothing toward fixed costs. If price is lower, additional sales deepen the loss. At zero fixed cost, zero sales is already break-even, but a negative contribution is still a warning. Capacity limits, changing unit costs and several product types require a fuller model.

Planning estimate only. Check all costs, tax treatment and your actual circumstances. Calculation and rounding notes.