Break-Even Calculator
The break-even point is where total revenue equals total costs—no profit, no loss. Enter your fixed costs, variable cost per unit, and selling price per unit to get the number of units and the revenue you need to break even. Essential for pricing and capacity decisions.
Find break-even
How it works
At break-even: Revenue = Fixed costs + (Variable cost × Units). So Price × Units = Fixed + (Variable × Units). Solving for units: Break-even units = Fixed costs / (Price − Variable cost). The denominator (Price − Variable cost) is contribution margin per unit. Break-even revenue = Break-even units × Price.
Example: Fixed $10,000, variable $5/unit, price $15/unit. Contribution = $10. Break-even units = 10,000 / 10 = 1,000 units. Break-even revenue = 1,000 × 15 = $15,000.
When to use it
Use this when launching a product, changing prices, or deciding whether to take on fixed costs (e.g. new location). It shows the minimum you need to sell to cover costs. Above that, each unit adds to profit.
Frequently asked questions
- What are fixed vs variable costs? Fixed costs do not change with output (rent, salaries). Variable costs depend on units produced (materials, direct labor per unit).
- What if I have multiple products? Break-even is usually computed for one product or an average unit. For a mix, use a weighted average price and variable cost or run separate calculations.