Break-even Calculator
Find the break-even point in units and revenue from fixed costs, price per unit, and variable cost per unit.
Guide
What is break-even?
Break-even is the point where total revenue covers total costs. Below break-even, the business loses money on those units. Above break-even, each additional unit contributes profit after fixed costs are covered.
Formula
Contribution margin per unit = Price per unit − Variable cost per unit. Break-even units = Fixed costs ÷ Contribution margin per unit. Break-even revenue = Break-even units × Price per unit. Price per unit must exceed variable cost per unit.
Worked example
With fixed costs of 5,000, a price of 50 per unit, and variable cost of 20 per unit, contribution margin is 30. Break-even units are 5,000 ÷ 30 = 166.67 units. Break-even revenue is 166.67 × 50 = 8,333.33.
Assumptions and limitations
The Calculator uses a single product with constant price and variable cost per unit. It does not model step costs, discounts, taxes, multiple products, or changing prices within the period.
Common questions
Why must price exceed variable cost?
Otherwise each unit sold would not contribute toward covering fixed costs and break-even would be undefined. Can fixed costs be zero? Yes. Break-even units are zero when there are no fixed costs. Is break-even revenue the same as profit? No. At break-even, profit is zero because revenue equals total cost.
Methodology
The Calculator applies the standard contribution-margin break-even formulas with exact decimal arithmetic and rounds only displayed values.