Break-Even Calculator
Units you must sell to cover fixed and variable costs.
Input sheet
DIY at your own risk. Calcora's calculators and guides are general estimates and information only — not professional, engineering, legal, or safety advice. Always verify local building codes and permit requirements, and hire a licensed pro for electrical, gas, plumbing, structural, or any work you're not fully comfortable doing yourself.
Before a product turns a profit, it first has to cover its costs. Break-even analysis tells you exactly how many units you must sell to get there — the line between losing money and making it.
How it works
Fixed costs divided by the contribution margin (price minus variable cost per unit) is the break-even quantity.
The key concept is contribution margin: the price per unit minus the variable cost to make each unit. That margin is what each sale contributes toward covering your fixed costs. Divide total fixed costs by the contribution margin and you have the break-even quantity.
If the price doesn't exceed the variable cost, the contribution margin is zero or negative and there is no break-even point — every sale loses money, so the calculator flags that case. Above break-even, every additional unit's full margin drops to the bottom line as profit.
Break-even units = fixed costs ÷ (price per unit − variable cost per unit)
Worked examples
$10,000 fixed costs, $50 price, $30 variable cost per unit → 500 units to break even ($25,000 revenue)
Contribution margin is $50 − $30 = $20/unit; $10,000 ÷ $20 = 500 units, which at $50 each is $25,000 in break-even revenue.
$10,000 fixed costs, $50 price, $40 variable cost → 1,000 units to break even
A thinner $10 margin doubles the units needed: $10,000 ÷ $10 = 1,000 units.
Tips & gotchas
- Raising price or cutting variable cost widens the contribution margin and lowers break-even faster than chasing more volume.
- Classify costs correctly — rent and salaries are usually fixed, while materials and per-unit shipping are variable; misclassifying them skews the result.
- Use break-even to pressure-test a price: if the units needed exceed what the market will plausibly buy, the price or cost structure needs work.
- Every unit sold past break-even contributes its full margin as profit, which is why scaling a product with a healthy margin is so powerful.
FAQ
What is contribution margin?
It's the price per unit minus the variable cost per unit — the amount each sale contributes toward fixed costs and, after break-even, toward profit.
What counts as a fixed cost versus a variable cost?
Fixed costs don't change with volume — rent, salaries, insurance. Variable costs scale with each unit — materials, packaging, per-unit shipping. Only variable costs reduce the contribution margin.
Why might there be no break-even point?
If your price is at or below the variable cost per unit, each sale loses money and no volume can cover fixed costs. You must raise the price or cut variable costs before break-even is possible.
Related calculators
Tip with Tax Calculator · Salary to Hourly Calculator · Simple Interest Calculator · Rule of 72 Calculator · Mortgage Calculator