Break-Even Calculator
Break-even point is where total revenue equals total costs (no profit, no loss). Formula: Fixed Costs / (Price - Variable Cost per Unit). For example, if fixed costs = $10,000, price = $50, variable cost = $30, break-even = 10,000 / (50-30) = 500 units. Below 500 units you lose money, above 500 you profit. Contribution margin = price - variable cost. Essential for pricing decisions and business planning.
Calculate your break-even point in units and revenue. Find contribution margin, visualize total costs vs revenue with profit/loss zones, run sensitivity analysis on price changes, and determine units needed for a target profit. Monthly fixed costs breakdown option included.
Mode
Fixed Costs (Total)
Variable Cost per Unit
Selling Price per Unit
Break-Even Point
400 units
$20,000.00 in revenue
Contribution Margin
$25.00
50.0% of selling price
Fixed Costs
$10,000.00
Variable Cost / Unit
$25.00
Selling Price / Unit
$50.00
Break-Even Chart
Sensitivity Analysis — Price Changes
| Change | Price / Unit | Contribution Margin | Break-Even Units | Break-Even Revenue |
|---|---|---|---|---|
| -20% | $40.00 | $15.00 | 667 | $26,666.67 |
| -10% | $45.00 | $20.00 | 500 | $22,500.00 |
| Current | $50.00 | $25.00 | 400 | $20,000.00 |
| +10% | $55.00 | $30.00 | 334 | $18,333.33 |
| +20% | $60.00 | $35.00 | 286 | $17,142.86 |
Shows how ±10% and ±20% changes in selling price affect your break-even point.
Break-Even Analysis Explained
- Break-Even Point: The number of units you must sell to cover all costs (fixed + variable). Formula: Fixed Costs ÷ (Selling Price − Variable Cost)
- Contribution Margin: Selling Price − Variable Cost per unit. This is the amount each unit contributes toward covering fixed costs and generating profit.
- Fixed Costs: Costs that remain constant regardless of production volume (rent, salaries, insurance).
- Variable Costs: Costs that change with each unit produced (materials, labor per unit, shipping).
- Target Profit: To find units needed for a specific profit: (Fixed Costs + Target Profit) ÷ Contribution Margin.
How to Use
- Enter your value in the input field
- Click the Calculate/Convert button
- Copy the result to your clipboard
Frequently Asked Questions
- What is a break-even point?
- The break-even point is the number of units you must sell for total revenue to equal total costs (fixed + variable). At this point, profit is zero — you are neither making nor losing money. Formula: Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). Any units sold beyond this point generate profit.
- What is contribution margin?
- Contribution margin is the difference between selling price per unit and variable cost per unit. It represents how much each unit sold contributes toward covering fixed costs and generating profit. For example, if you sell a product for $50 with a variable cost of $25, your contribution margin is $25 per unit (50% contribution margin ratio).
- What is the difference between fixed costs and variable costs?
- Fixed costs remain the same regardless of how many units you produce — examples include rent, salaries, insurance, and loan payments. Variable costs change with each unit produced — examples include raw materials, direct labor per unit, packaging, and shipping. Understanding this distinction is essential for accurate break-even analysis.
- How do I calculate units needed for a target profit?
- To find the number of units needed for a specific profit target, add the target profit to your fixed costs, then divide by the contribution margin. Formula: Units = (Fixed Costs + Target Profit) ÷ (Selling Price − Variable Cost). For example, with $10,000 fixed costs, $25 contribution margin, and $5,000 target profit: (10,000 + 5,000) ÷ 25 = 600 units.
- What is sensitivity analysis in break-even?
- Sensitivity analysis shows how changes in key variables (like selling price) affect your break-even point. For example, a 10% price increase might significantly reduce the units needed to break even, while a 10% decrease could dramatically increase them. This helps businesses understand risk and plan pricing strategies.
- Why is break-even analysis important for businesses?
- Break-even analysis helps businesses determine minimum sales targets, set pricing strategies, evaluate new product viability, plan for profitability, and make informed decisions about cost structures. It is particularly valuable for startups, new product launches, and when considering price changes or cost reductions.