Business calculator
Free Break-Even Calculator
Find the units and revenue needed to cover fixed and variable costs.
Break-Even Calculator
Break-even guidance
See the sales level where costs are covered
A break-even point connects the costs of operating or producing something with the price you charge. This calculator separates fixed costs from per-unit costs so the result is easy to explain.
Contribution margin
Selling price minus variable cost shows how much one unit contributes toward fixed costs.
Units are rounded up
A partial physical unit cannot usually be sold, so the practical target rounds upward.
Revenue view
Break-even revenue translates the unit target into a sales-dollar target.
A planning measure
Break-even does not include profit, taxes, or every operational uncertainty.
How to use this calculator
Enter the cost structure behind one sale
- 1
Add fixed costs
Include costs that stay broadly the same as unit volume changes, such as rent or software.
- 2
Enter unit economics
Use the selling price and the variable cost attached to one unit.
- 3
Read the target
The calculator shows both units and revenue needed to cover fixed costs.
What is a break-even point?
The break-even point is where total revenue equals total costs. Below it, the activity has not yet covered its fixed and variable costs; above it, additional contribution margin can support profit.
The calculation assumes the selling price and variable cost remain stable across the units being considered.
Units versus revenue break-even
Break-even units answer how many items or billable units are needed. Break-even revenue answers how much sales value those units represent at the chosen price.
Revenue is useful for sales planning, while units are usually easier for inventory, production, or delivery planning.
Fixed and variable costs
Fixed costs do not move directly with each additional unit. Variable costs do. Keep the two categories separate because putting a per-unit cost into fixed costs can distort the result.
Example: 500 units
Fixed costs: $10,000 Selling price: $50 per unit Variable cost: $30 per unit Contribution margin: $20 Break-even units: $10,000 / $20 = 500 Break-even revenue: 500 x $50 = $25,000
Common mistakes to avoid
- Using total variable costs where variable cost per unit is required.
- Treating break-even as a profit target.
- Leaving out a meaningful fixed operating cost.
- Relying on a result after the selling price has fallen below variable cost.
Frequently asked questions
Practical questions people ask about this tool
Why must selling price be higher than variable cost?
Each unit needs to contribute something toward fixed costs. If variable cost is equal to or higher than price, there is no positive contribution margin to reach break-even.
Why are break-even units rounded up?
The practical target rounds up because selling a fraction of a physical unit generally cannot cover the remaining cost.
Does break-even include profit?
No. Break-even only identifies the point where the specified costs are covered. A profit target would require an additional amount.
Can I use this for services?
Yes, when you can define a consistent unit of service and a variable cost per unit, hour, project, or engagement.
Related tools
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