Break-Even Calculator
Calculate how many units you need to sell to cover your costs.
Break-Even Results
What Is a Break-Even Point?
The break-even point is the level of sales where total revenue equals total costs. At this point, a business has neither a profit nor a loss.
The Break-Even Calculator helps businesses, entrepreneurs, sellers, and students determine how many units must be sold before a business begins generating profit.
Break-Even Formula
Break-Even Example
Suppose your fixed costs are $5,000, your variable cost per unit is $20, and your selling price is $50.
Because you cannot normally sell a fraction of a physical unit, you would need to sell at least 167 units to cover the stated costs.
Understanding Contribution Per Unit
Contribution per unit is the amount remaining from each sale after subtracting the variable cost. This amount contributes toward covering fixed costs. Once fixed costs have been covered, additional contribution generally contributes to profit, assuming other business costs remain unchanged.
Frequently Asked Questions
What does break-even mean?
Break-even means that total revenue equals total costs, resulting in neither profit nor loss.
What happens if the selling price equals the variable cost?
There is no contribution margin available to cover fixed costs, so a normal break-even point cannot be calculated.
What happens if the selling price is lower than the variable cost?
Each sale would contribute less than zero toward fixed costs, so the basic break-even formula cannot produce a meaningful positive break-even point.
Can I use this calculator for a small business?
Yes. It can be used for products, services, retail sales, manufacturing, and other situations where fixed costs, variable costs, and selling price are known.