Calculate the exact number of units and revenue needed to break even, plus your contribution margin and margin of safety.
How to use the break-even point calculator
- Enter your total fixed costs for the period, rent, salaries, insurance, and similar costs that don't change with sales volume.
- Enter the selling price per unit and the variable cost per unit, the direct cost of producing or delivering each unit.
- Optionally enter your projected sales in units to see your margin of safety.
- Click Calculate Break-Even to see the exact units and revenue needed to cover all costs.
The break-even formula explained
Break-even units equal fixed costs divided by contribution margin per unit, where contribution margin is the selling price minus the variable cost per unit. Multiplying break-even units by the selling price gives break-even revenue. Everything sold beyond that point drops straight to profit, since fixed costs are already fully covered.
Example
With fixed costs of 50,000, a selling price of 40, and a variable cost of 25 per unit, the contribution margin is 15. Break-even is 50,000 ÷ 15, or about 3,334 units, generating break-even revenue of roughly 133,360.
Frequently asked questions
- What is the break-even point?
- The sales level at which total revenue equals total costs, so profit is zero.
- What is contribution margin and why does it matter?
- Selling price minus variable cost per unit; a higher margin means fewer units needed to break even.
- What does margin of safety tell you?
- How far sales are above break-even, showing the buffer before a loss occurs.
- Does this tool store or send my cost figures anywhere?
- No, all calculations happen locally in your browser.
Bookmark this page and re-run it whenever costs or pricing change, break-even shifts more than most people expect from a small price or cost adjustment.
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