Break-Even Calculator
With fixed costs of 10,000, a price of 25 and a variable cost of 15, each unit contributes 10, so you break even at 1,000 units and 25,000 in revenue.
How to use
- Enter your fixed costs for the period, the selling price of one unit, and the variable cost of one unit.
- Read the break-even quantity, rounded up to a whole unit, along with the exact figure and the break-even revenue.
- Optionally enter a target profit to see how many units and how much revenue you need to reach it.
How it works
Contribution margin per unit = price - variable cost per unit. Contribution margin ratio = contribution margin ÷ price.
Break-even units = fixed costs ÷ contribution margin per unit. You cannot sell part of a unit, so the headline figure is rounded up to the next whole number. The exact value is shown too.
Break-even revenue = break-even units × price, which also equals fixed costs ÷ contribution margin ratio.
Units for a target profit = (fixed costs + target profit) ÷ contribution margin per unit, again rounded up.
If the price is not above the variable cost, each sale loses money or adds nothing, so no break-even exists and the calculator shows an error.
Worked examples
Money values are plain numbers in any one currency. The last column is the revenue at the whole-unit quantity needed to cover fixed costs plus any target profit; the third case adds a target profit of 5,000.
| Fixed costs | Price | Variable cost | Contribution | Exact units | Whole units | Revenue |
|---|---|---|---|---|---|---|
| 10,000 | 25 | 15 | 10 | 1,000 | 1,000 | 25,000 |
| 10,000 | 30 | 18 | 12 | 833.33 | 834 | 25,020 |
| 10,000 | 25 | 15 | 10 | 1,000 | 1,000 | 37,500 |
Terms used
- Fixed costs stay the same however much you sell in the period, such as rent or a salary.
- Variable cost per unit rises with each unit made or sold, such as materials or packaging.
- Contribution margin per unit is price minus variable cost. It is what each sale adds toward covering fixed costs.
- Contribution margin ratio is contribution divided by price.
Limits of the model
The calculation assumes one product, a constant price, and a constant variable cost per unit. Discounts, step-up costs and mixed products need a separate calculation for each case.
FAQ
Why is the result rounded up?
At the exact fractional quantity you would only just break even, but units are whole. Rounding down would leave you slightly below break-even, so the calculator rounds up. The exact value is listed under the result.
What counts as a fixed cost?
A cost that does not change with the quantity sold in the period, such as rent, insurance or a salary. Costs that rise with each unit, such as materials, are variable.
What does the contribution margin ratio tell me?
The share of each sale left after variable costs. At 40%, every 100 of revenue leaves 40 to cover fixed costs and profit.
Why can I not get a result when price equals variable cost?
Then each sale contributes nothing toward fixed costs, so no quantity ever breaks even. Raise the price or lower the variable cost.
Does this work with any currency?
Yes. Use the same currency for every money field and enter plain numbers.