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Break even calculator

The break-even point is fixed costs divided by the contribution margin per unit. With $9,000 of fixed costs and a $25 product that costs $10 per unit to make and sell, you break even at 600 units, or $15,000 of sales.

Profit Margin Calc editorial teamUpdated 3 sources

Calculator 07

Break-even point

From unit economics, or from a contribution margin ratio

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Costs

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Break-even point600 units600.00 exactly
Break-even sales$15,000
Contribution per unit$15.0060.0% of price
For target profit800 units$20,000 of sales

With $9,000.00 of fixed costs and $15.00 of contribution per unit, you break even at 600 units, or $15,000 of sales.

$0$9.4k$19k$28k$38k 03757501,1251,500 units sold Break-even 600 units
Revenue Total cost Fixed cost Loss Profit

Formula. Break-even units = fixed costs ÷ (price − variable cost per unit), rounded up. Break-even sales = fixed costs ÷ contribution margin ratio. Units for a target profit = (fixed costs + target) ÷ contribution per unit.

Break even point formula

The break-even point is the level of sales at which total revenue equals total costs, so profit is zero; in units it is total fixed costs divided by contribution margin per unit.[1]

Break-even units=Fixed costsPrice − Variable cost per unitExample: $9,000 ÷ ($25 − $10) = 600 units
Break-even sales=Fixed costsContribution margin ratioExample: $9,000 ÷ 60% = $15,000

Round units up: selling 599 units still leaves a small loss. To earn a target profit, add it to fixed costs before dividing; $3,000 of profit needs 800 units here.

How price and unit cost move the break-even point

A higher price or a lower variable cost widens the contribution per unit, which cuts the break-even volume sharply. The table holds fixed costs at $9,000.

Break-even units by price (rows) and variable cost per unit (columns)
Price$8 cost$10 cost$12 cost
$207509001125
$25530600693
$30410450500

Small changes matter: raising the price from $25 to $30 lowers break-even from 600 to 450 units at a $10 unit cost. The price increase calculator checks whether the lost sales would cancel that gain.

Reading the break-even chart

The chart in the calculator plots revenue and total cost against units sold; they cross at the break-even point. Below it, the shaded red area is the loss; above it, the green area is profit. The dashed line is fixed cost, which is spent even if nothing sells, and the gap between the total-cost line and the fixed-cost line is variable cost.[2]

Break-even analysis for a new business

A break-even analysis tells a new business how much it has to sell to cover its costs, and the SBA lists it among the financial projections a business plan should include.[3] Work through it like this:

  1. List monthly fixed costs: rent, insurance, salaries, software, loan payments.
  2. Work out the variable cost of one unit or one job, including payment fees and shipping. The contribution margin calculator shows the per-unit contribution.
  3. Divide to get break-even units, then compare with a realistic monthly sales estimate.
  4. Add the salary you need from the business as a target profit; that is the real break-even for an owner.

For the full profit picture at a given volume, use the profit calculator; the vending machine profit calculator works the same idea through for a small route business, down to the daily sales a machine needs; for a price that covers a target margin after marketplace fees, use the selling price calculator.

Frequently asked questions

How do you calculate the break-even point?

Divide fixed costs by the contribution margin per unit (price minus variable cost per unit). $9,000 ÷ $15 = 600 units.

How do I find break-even in sales dollars?

Divide fixed costs by the contribution margin ratio. With a 60% ratio, $9,000 ÷ 0.6 = $15,000 of sales.

What is included in fixed costs?

Costs that stay the same whatever you sell in the period: rent, salaries, insurance, subscriptions, equipment leases and loan payments.

What if price is lower than variable cost?

Then there is no break-even point. Every sale adds to the loss, so the price or the unit cost has to change first.

Is break-even the same as payback period?

No. Break-even is the sales volume that covers costs in a period. Payback is how long it takes cumulative profit to repay an upfront investment.

Sources

  1. Principles of Accounting, Volume 2: Managerial Accounting, 3.2 Calculate a Break-Even Point in Units and Dollars · OpenStax, Rice University, 2019
  2. Principles of Accounting, Volume 2: Managerial Accounting, 3.1 Contribution margin per unit, ratio and total · OpenStax, Rice University, 2019
  3. Calculate your startup costs: break-even point · U.S. Small Business Administration, accessed 2026-11-13