Break-Even Calculator
Find the exact number of units or revenue needed to cover all costs. Enter your fixed costs, variable costs, and sale price to see your break-even point, contribution margin, and profit scenarios.
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Break-Even by Units
Results
| Break-even units | — |
|---|---|
| Break-even revenue | — |
| Fixed costs | — |
| Total variable costs at BE | — |
| Contribution margin | — |
| CM ratio | — |
Revenue for Target Profit
Use this tab when you know your CM ratio and want to find the revenue needed to hit a specific profit target.
Results
| Required revenue | — |
|---|---|
| Total variable costs | — |
| Resulting profit | — |
Formula: Required Revenue = (Fixed Costs + Target Profit) ÷ CM Ratio
Understanding Break-Even Analysis
The break-even formula
Break-even units = Fixed Costs ÷ Contribution Margin per Unit. The contribution margin (CM) is the portion of each sale that contributes to fixed cost coverage and eventual profit. Once total contributions from sales equal fixed costs, you break even. Every unit sold beyond that point generates profit equal to the CM per unit.
Using break-even for decisions
Break-even analysis answers critical business questions: Can I afford to cut my price? How many units must I sell to justify a new hire (which increases fixed costs)? What happens if variable costs rise? By re-running this calculator with different assumptions, you can model scenarios and understand the sensitivity of your profit to changes in price, cost, and volume — without spreadsheets.
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Open calculator →FAQ
What is break-even analysis?
Break-even analysis finds the sales volume where total revenue equals total costs — zero profit or loss. It is calculated as Fixed Costs ÷ Contribution Margin per Unit. Sales above break-even generate profit; sales below it produce a loss. The analysis helps businesses set prices, evaluate cost changes, and plan production targets.
What is contribution margin?
Contribution margin (CM) per unit = Sale Price − Variable Cost per Unit. It represents how much each unit sold contributes to covering fixed costs before generating profit. The CM Ratio (CM ÷ Price) shows what fraction of each dollar of revenue is available for fixed costs and profit. A higher CM ratio means fewer units are needed to break even.
What are fixed vs variable costs?
Fixed costs do not change with production volume (rent, salaries, insurance, depreciation). Variable costs change proportionally with production (raw materials, packaging, shipping per unit). In break-even analysis, fixed costs must be covered by the total contribution margin from all units sold; variable costs are already accounted for in the CM calculation.
How do I use break-even for pricing decisions?
Raising your price increases CM per unit and lowers the break-even volume. Lowering price does the opposite. Compare your break-even volume to realistic market demand to determine if a price point is viable. The profit scenario table in this calculator shows profit or loss at sales levels from 50% to 200% of break-even, helping you stress-test different scenarios.