Break-Even Calculator
Calculate how many units you need to sell to break even.
Results
The break-even point tells you exactly how many units you need to sell to cover all costs. Below break-even you lose money; above it you profit. Enter your fixed costs (rent, salaries, equipment), the price per unit and the variable cost per unit (materials, shipping) to find your target.
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Frequently asked questions
Break-even units = Fixed Costs / (Price - Variable Cost per Unit). The denominator (Price - Variable Cost) is called the contribution margin - the amount each unit contributes toward covering fixed costs.
Fixed costs stay the same regardless of volume: rent, salaries, insurance, equipment leases. Variable costs change with each unit: materials, shipping, packaging, sales commissions.
Contribution margin is selling price minus variable cost per unit. If you sell a widget for $50 and it costs $20 in materials/shipping, the contribution margin is $30. Each unit contributes $30 toward fixed costs and profit.
If your break-even is too high (more units than you can realistically sell), you need to either raise prices, reduce variable costs or reduce fixed costs. Break-even analysis helps you test pricing scenarios before committing.
Every unit sold after break-even generates profit equal to the contribution margin. If your margin is $30/unit and you sell 100 units past break-even, that is $3,000 in profit.