Free Break-Even Point Calculator
Your break-even point is the sales volume where revenue exactly equals total cost — no profit, no loss. Knowing this number tells you the minimum you must sell every month to stay open.
Results
Cost breakdown at break-even
- Fixed costs62.5%
- Variable costs37.5%
Total revenue $16,000.00 = Fixed $10,000.00 + Variable $6,000.00
What the Break-Even Calculator does
The break-even point is the sales volume, in units or revenue, at which total revenue exactly equals total cost, leaving zero profit and zero loss. It is a threshold calculation, not a margin percentage — it tells you a volume target, not a rate of return.
Methodology and formula
Break-even units = Fixed Costs / (Selling Price − Variable Cost per Unit); Break-even revenue = Fixed Costs / Contribution Margin Ratio.
Worked example
- Inputs
- Fixed costs 12,000/month; selling price 40; variable cost per unit 24.
- Result
- Contribution margin 16 (40% ratio); break-even units 750; break-even revenue 30,000.
Below 750 units a month this product line loses money; every unit after that contributes $16 straight to profit. A $2 price rise would cut the break-even point to about 667 units — proof that pricing moves break-even faster than chasing extra volume.
When to use this tool
Use this tool to find the minimum volume a product or business needs to cover fixed costs before deciding whether a price or cost structure is viable. Use the Net Profit Margin Calculator once you're past break-even and want to see what's actually left after tax, and Product Pricing Calculator to set the selling price that feeds into this calculation.
About the Break-Even Calculator
The break-even formulas
Break-even units = Fixed Costs / (Selling Price − Variable Cost per Unit). Break-even revenue = Fixed Costs / Contribution Margin Ratio, where contribution margin ratio = (Selling Price − Variable Cost) / Selling Price.
Fixed vs variable cost — get this split right
Fixed costs are what you pay regardless of volume: rent, salaries, insurance, software. Variable costs move with each unit sold: materials, packaging, per-transaction fees, shipping. Miscategorising a cost can move your break-even point by hundreds of units.
Using break-even for pricing decisions
If break-even feels unreachable, you have three levers: cut fixed costs, cut variable cost per unit, or raise the selling price. Small price increases move break-even faster than large volume increases because they widen the contribution margin.
Frequently asked questions
What if my selling price is lower than variable cost?
Do I include my own salary as a fixed cost?
How often should I recalculate break-even?
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