This break-even calculator estimates how many units must be sold before total revenue covers fixed and variable costs. It can also estimate break-even revenue and compare changes in price, cost, or fixed expenses.
Break-even analysis is a planning model. It assumes the inputs are meaningful and often treats price, cost, product mix, and sales conditions as stable, which may not match a real business.
The break-even point is where total revenue equals total costs. At that point, profit is zero; sales above it may produce profit and sales below it may produce a loss under the selected assumptions.
Contribution margin per unit is selling price minus variable cost per unit. It shows how much each sale contributes toward fixed costs after its variable cost is covered.
Contribution margin per unit = selling price − variable cost per unitThe contribution margin must be positive for the standard break-even formula to produce a meaningful positive unit count.
Break-even units = fixed costs ÷ contribution margin per unitRound units up when planning a whole-unit sales target because a fractional unit cannot usually be sold.
Break-even revenue = break-even units × selling priceRevenue is based on the same price assumption used in the unit calculation.
If selling price is equal to or below variable cost, each sale does not contribute enough toward fixed costs and the standard model has no positive break-even point.
How many units break even with 10,000 fixed costs, a 50 price, and 30 variable cost?
How does raising price to 60 affect the same business?
What happens when variable cost rises to 40?
How does reducing fixed costs to 8,000 change the result?
What is estimated profit at 700 units in the basic scenario?
What if price is 30 and variable cost is 35?
Break-even is a threshold, not a forecast of demand. Compare it with realistic capacity, market demand, cash flow, and sales conversion.
A lower break-even point can result from higher prices, lower variable costs, or lower fixed costs, but each change may affect demand or quality.
Mixing monthly fixed costs with annual sales or costs.
Leaving payment fees, shipping, packaging, commissions, or direct labour out of variable cost.
Using accounting profit definitions without checking which costs the model includes.
Treating break-even sales as guaranteed demand.
This tool is a simplified planning model, not accounting, tax, investment, or business advice. It does not model demand elasticity, multiple products, inventory, capacity, cash timing, or uncertainty.
Use documented cost definitions and review the scenario with an accountant or qualified adviser for significant pricing, hiring, or financing decisions.
Break-even units equal fixed costs divided by contribution margin per unit, where contribution margin is price minus variable cost.
A business generally cannot sell a fraction of a unit, so round the required target up for planning.
They are costs that do not change directly with short-term unit volume, such as rent or base salaries, under the selected period.
They change with units or sales, such as materials, packaging, per-transaction fees, or commissions.
A negative contribution margin means the price does not cover variable cost, so the standard positive break-even result is not meaningful.
Use a weighted average contribution margin only when the product mix is stable and documented, or run separate scenarios.
Only if taxes are included in the cost definition. Add taxes and other expenses explicitly when needed.
No. It is the level at which the selected costs are covered. A sales target may need additional margin for profit, risk, and cash reserves.
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