Break-Even Calculator
Find the unit sales needed to cover fixed and variable costs. Your work stays on this device whenever possible.
How to use Break-Even Calculator
- Enter the costs that do not change with sales in Total Fixed Costs ($), such as rent and salaries.
- Fill Unit Selling Price ($) and Unit Variable Cost ($); the price must exceed the variable cost.
- Type a goal in Target Profit ($ optional) if you also want the volume needed to earn a set profit.
- Press "Calculate break-even point" to see the break-even units, revenue and the contribution margin.
- Scan the volume sensitivity table from 50% to 200% of break-even, or press "Download Sensitivity Table (CSV)".
Worked example
Enter fixed costs 12,000, price 40, variable cost 16 and target profit 3,000. Margin per unit is 24 (a 60.00% ratio). Break-even is 12,000 ÷ 24 = 500 units, or 20,000.00 revenue. The target needs (12,000 + 3,000) ÷ 24 = 625 units, or 25,000.00. At 50% of break-even, 250 units earn 10,000 against 16,000 cost, a 6,000 loss.
When to use this tool
- Deciding how many units a new product must sell to cover its launch costs.
- Testing how a price increase of a few dollars moves the break-even volume.
- Presenting a lender with the sales level needed for a target profit.
Important limitations
Assumes linear variable costs and constant selling prices regardless of production volume. Does not account for tiered volume discounts, stepped fixed costs, or inventory carrying charges.
Frequently asked questions
How is break-even volume calculated?
Fixed costs divided by the contribution margin per unit, which is price minus variable cost. The result is rounded up to a whole unit, because selling a fraction of a unit does not cover the shortfall.
What is the contribution margin ratio?
It is the per-unit margin as a percentage of price. A ratio of 60% means each sales dollar leaves 60 cents to cover fixed costs and profit once variable costs are paid.
Why does the tool refuse some inputs?
If the price is not above the variable cost, each unit loses money, so no volume can reach break-even. The error message states how much is lost per unit sold.
Can I model several products?
Yes. Use the Multi-Product Sales Mix section below the results to enter each product's price, variable cost and relative sales-mix ratio; it computes a weighted-average contribution margin and a break-even volume split across products.
What does the sensitivity table show?
It tests six volumes, from 50% to 200% of break-even, giving revenue, variable cost, total cost and profit or loss at each. Below 100% you should see losses, above it profit.