Break-Even Calculator
Determine how many units you need to sell to cover your fixed and variable costs. An essential tool for business planning, pricing strategy, and financial forecasting.
Break-Even Point
Revenue Needed
Contribution Margin
This calculator provides estimates and is for informational purposes only.
Understanding Break-Even Analysis
The break-even point is where total revenue equals total costs, resulting in zero profit or loss. The formula is: Break-Even Units = Fixed Costs ÷ (Selling Price – Variable Cost).
The contribution margin is the difference between the selling price and variable cost per unit. It represents how much each unit sold contributes toward covering fixed costs and generating profit.
Frequently Asked Questions
What are fixed costs?
Fixed costs don't change with production volume. Examples include rent, salaries, insurance, and loan payments. They remain constant whether you sell 1 unit or 10,000.
What are variable costs?
Variable costs change with each unit produced. Examples include raw materials, packaging, shipping per item, and sales commissions.
How can I lower my break-even point?
You can reduce fixed costs, increase selling price, or decrease variable costs per unit. Each strategy has trade-offs — higher prices may reduce demand, while cutting costs may affect quality.