Break-Even Point Calculator: Units and Sales to Cover Your Costs
Enter the selling price, the variable cost per unit, and your total fixed costs to see how many units, and how much in sales, you need to break even. Add a target profit to see the volume required to reach it, and an expected sales volume to see your profit and margin of safety. Everything is calculated in your browser, and nothing you type is sent to a server. For percentages, try the Ratio Calculator; for sales tax, try the Tax Calculator.
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Enter a number to see the profit and margin of safety at that volume.
Notes
- Unit counts are rounded up to a whole number (for example, 500.2 becomes 501). Break-even sales are fixed costs divided by the contribution margin ratio, not the rounded unit count times the price.
- This does not fit cases where price or variable cost changes with volume (discounts, supplier tiers) or where fixed costs step up as sales grow. Use average figures.
- What counts as fixed or variable differs by business. Whether labor or advertising goes in one group or the other changes the result, so classify costs to match your situation.
Glossary
Break-even point
The sales volume or revenue at which total revenue equals total cost and profit is exactly zero. Above it you make a profit; below it you lose money.
Variable and fixed costs
Variable costs, like materials and shipping, rise with each unit sold. Fixed costs, like rent and salaries, stay the same regardless of volume.
Contribution margin
Selling price minus variable cost: the amount each sale contributes toward fixed costs and profit. The ratio divides it by the selling price.
Margin of safety
How far actual or expected sales are above break-even sales, as a share of sales. The higher it is, the more sales can fall before you lose money.
FAQ
How is the break-even point calculated?
Break-even units are fixed costs divided by (selling price − variable cost per unit); break-even sales are fixed costs divided by the contribution margin ratio. For example, with a price of 1,000, variable cost of 400, and fixed costs of 300,000, each unit contributes 600, so you break even at 500 units and 500,000 in sales.
Why does it say there is no break-even point?
If variable cost is equal to or higher than the selling price, every sale adds no margin or even a loss, so fixed costs can never be recovered. Raise the price or cut the variable cost until the price is above the variable cost.
How do I split costs into fixed and variable?
Variable costs rise with each unit sold, such as materials, shipping, and payment fees. Fixed costs stay the same regardless of volume, such as rent, salaried staff, and depreciation. For mixed items like advertising or contractors, put them in whichever group fits your business better.
How should I read the margin of safety?
It shows how far expected sales are above break-even sales, as a percentage of expected sales. A 20% margin means sales could drop by 20% before you stop making a profit. A negative value means the expected volume is below break-even.
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