Break-Even Calculator
Work out your business break-even: how many units and how much revenue you need to cover fixed and variable costs. Shows contribution margin and how much to sell to hit a profit goal.
Rent, salaries, subscriptions — what doesn't change with sales
Cost per sale: product, shipping, fee, packaging
How much profit you want this month
Enter fixed costs, price and variable cost per unit to find how many sales you need to break even.
How it's calculated
- contribution margin = price − variable cost
- break-even (units) = fixed costs ÷ contribution margin
- for goal = (fixed costs + profit) ÷ contribution margin
How to use it
- • Anything that doesn't change with volume is a fixed cost: rent, salary, software.
- • Variable cost is born with each sale: product, shipping, card fee.
- • The higher the contribution margin, the less you need to sell to break even.
- • Use the profit goal to turn break-even into a sales target.
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FAQ
Frequently asked questions
- What is the break-even point?
- It is the sales level where revenue exactly covers all costs — fixed and variable — and profit is zero. Past that point, each extra sale starts generating profit. Below it, the business runs at a loss.
- How do you calculate the break-even point?
- Divide fixed costs by the contribution margin per unit (sale price minus variable cost per unit). The result is how many units you need to sell to break even. Multiply by the price to get break-even revenue.
- What is contribution margin?
- It's how much is left from each sale after paying that unit's variable costs, to help cover fixed costs. The higher the contribution margin, the fewer units you need to sell to break even.
- How do I use break-even to set goals?
- Add your desired profit to fixed costs and divide by the contribution margin: you get how many units to sell to hit the goal. The calculator does this in the profit-goal field.
