Break-Even Calculator
The break-even point is where your revenue equals your costs — you're not losing money, but you're not making a profit either. Use this calculator to find out how many units you need to sell or the revenue required to cover your costs.
How We Calculate This
Break-Even Units = Fixed Costs ÷ (Price - Variable Cost). Contribution Margin = Price - Variable Cost. Contribution Margin Ratio = Contribution Margin ÷ Price.
Frequently Asked Questions
What are fixed costs?
Fixed costs stay the same regardless of sales volume: rent, salaries, insurance, utilities, loan payments. They must be paid even if you sell nothing.
What are variable costs?
Variable costs change with production: materials, packaging, shipping, sales commissions. The more you sell, the higher these costs.
How do I use the break-even point?
Compare break-even units to your realistic sales forecast. If you can't sell that many units, you need to either raise prices, reduce costs, or reconsider the business model.
What is contribution margin?
Contribution margin is selling price minus variable costs. It's what each sale "contributes" toward covering fixed costs and eventually generating profit.
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