Calculators
Break-Even Calculator
Find break-even units, revenue, contribution margin, and target-profit units.
Estimate how many units must be sold to cover fixed and variable costs, or to reach an optional target profit. Use the same currency for every money input.
Break-even units
50
Exact mathematical quantity: 50 units; rounded up for whole-unit sales.
Contribution per unit
20
Contribution margin: 40%
Revenue at 50 units
2500
Profit at rounded quantity: 0
Break-even revenue (target profit = 0)
2500
This is a simplified cost-volume-profit model. It assumes fixed costs, unit price, and variable cost per unit remain constant over the analyzed range and does not predict demand or guarantee profitability.
About This Tool
Estimate the sales quantity required for revenue to cover a simplified set of fixed and variable costs. The calculator first finds contribution per unit—the selling price left after the entered variable cost—then uses that contribution to cover fixed costs. It also shows contribution margin, break-even revenue, and an optional target-profit quantity. This cost-volume-profit model is useful for learning, scenario planning, and checking pricing arithmetic, but it does not forecast customer demand or guarantee a business outcome.
How To Use It
- Enter total fixed costs for the period or scenario you want to analyze.
- Enter the selling price for one unit and the variable cost associated with that same unit.
- Leave target profit at zero for a standard break-even calculation, or enter a nonnegative target profit to estimate the units required to cover fixed costs plus that target.
- Review the exact mathematical quantity and the rounded-up whole-unit quantity. Rounding up is appropriate when units cannot be sold fractionally.
- Use one consistent currency and time/scenario basis, and include only costs that fit the simplified fixed-versus-variable assumptions.
Examples
1,000 fixed cost, 50 price, 30 variable cost
Contribution is 20 per unit. Break-even quantity is 1,000 ÷ 20 = 50 units. Revenue at break-even is 2,500 and contribution margin is 40%.
Quantity that requires rounding
With fixed costs of 1,000, price 45, and variable cost 28, contribution is 17. The exact break-even quantity is about 58.82, so 59 whole units are needed if fractional units cannot be sold.
Add a target profit
With fixed costs 1,000, price 50, variable cost 30, and target profit 500, required quantity is (1,000 + 500) ÷ 20 = 75 units.
Zero fixed costs
If fixed costs are zero and target profit is zero, the mathematical break-even quantity is zero. Each later unit contributes price minus variable cost toward profit under the model.
Useful Notes
Break-even units formula
Contribution per unit = selling price per unit − variable cost per unit. Break-even units = fixed costs ÷ contribution per unit. The selling price must be greater than variable cost for each sale to contribute toward fixed costs.
Contribution margin and break-even revenue
Contribution margin percentage = contribution per unit ÷ selling price × 100. Standard break-even revenue can be calculated as fixed costs ÷ contribution margin ratio. It represents the sales revenue corresponding to zero target profit under the same assumptions.
Target profit formula
Units for a target profit = (fixed costs + target profit) ÷ contribution per unit. When units are indivisible, the calculator rounds upward so the rounded quantity reaches or exceeds the mathematical target under the model.
What counts as fixed and variable cost
Fixed costs are modeled as unchanged across the analyzed sales range, while variable cost is modeled as constant per unit. Real businesses may have mixed costs, volume discounts, stepped staffing, capacity limits, commissions, taxes, returns, waste, multiple products, and other effects that do not fit this simple split.
Use break-even analysis as a scenario, not a forecast
The formula describes the relationship among the numbers entered. It does not establish that a given quantity can actually be sold, that prices will stay constant, or that all relevant costs have been captured. Use realistic scenarios and appropriate accounting or professional guidance for consequential decisions.
FAQ
What is the break-even point?
In this simplified model, it is the sales quantity where contribution from units sold exactly covers fixed costs, leaving zero profit and zero loss.
Why must price be higher than variable cost?
If each unit contributes zero or a negative amount after variable cost, selling more units cannot cover positive fixed costs under this model.
Why does the calculator round units up?
When a product or transaction cannot be divided, selling the fractional mathematical result is impossible. Rounding down would leave the modeled target short, so the displayed whole-unit requirement rounds upward.
What is contribution margin?
Contribution margin percentage is the portion of selling price left after the entered variable cost. That contribution is available to cover fixed costs and then profit in this simplified model.
Does break-even analysis include tax, demand, financing, or cash flow?
Not automatically. This calculator uses only the fixed costs, unit selling price, variable unit cost, and optional target profit you enter. It is not a demand forecast, cash-flow model, tax calculation, or guarantee of financial performance.
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