Break-Even Calculator

How it works

Break-even analysis finds the sales volume at which total revenue exactly covers total costs, so profit is zero. Every unit sold contributes its price minus its variable cost toward paying the fixed costs; that difference is the contribution margin. Break-even units = fixed costs / contribution margin. With $10,000 of fixed costs, a $50 price and $30 variable cost per unit, each sale contributes $20, so you need 500 sales, which is $25,000 of revenue, before the business earns its first dollar of profit. Fixed costs are expenses that do not change with volume: rent, salaries, software, insurance. Variable costs rise with each unit: materials, packaging, transaction fees, commissions. The model assumes a single product, constant prices and costs, and that everything produced is sold. Multi-product businesses weight the contribution margin across their product mix. Break-even is a floor, not a goal: it tells you the minimum viable sales level, how much cushion you have before losses, and how price or cost changes move that threshold. If your variable cost meets or exceeds your price, no sales volume can ever break even.