Break-Even Calculator
Find how many units you need to sell to cover your costs and hit a profit target
Costs and Pricing
Rent, salaries, insurance
Materials, packaging, fees
Break-even point
500 units
$25,000 in sales covers $10,000 of fixed costs · $20.00 contribution per unit
Contribution margin
$20.00
per unit, price − variable cost
Contribution margin ratio
40.0%
of each sale covers fixed costs
Units for target profit
750
to earn $5,000
Profit at 800 units
$6,000
margin of safety 37.5%
Profit at Different Sales Levels
| Units Sold | Revenue | Total Cost | Profit / Loss |
|---|---|---|---|
| 0 | $0 | $10,000 | −$10,000 |
| 125 | $6,250 | $13,750 | −$7,500 |
| 250 | $12,500 | $17,500 | −$5,000 |
| 375 | $18,750 | $21,250 | −$2,500 |
| 500 | $25,000 | $25,000 | $0 |
| 625 | $31,250 | $28,750 | $2,500 |
| 750 | $37,500 | $32,500 | $5,000 |
| 875 | $43,750 | $36,250 | $7,500 |
| 1,000 | $50,000 | $40,000 | $10,000 |
About Break-Even
Every sale contributes its price minus its variable cost toward your fixed costs. The break-even point is the sales volume where those contributions exactly cover fixed costs. Beyond it, each extra unit adds its full contribution to profit. Below it, the business loses money.
The Formulas
Break-even units = fixed costs ÷ (price − variable cost)
Break-even sales = fixed costs ÷ CM ratio
Units for target = (fixed + target profit) ÷ CM
CM = contribution margin per unit; CM ratio = CM ÷ price
Lower Your Break-Even
- •Raise prices where customers value the product most
- •Negotiate supplier costs to lift the contribution margin
- •Trim fixed costs such as unused space or subscriptions
- •Sell higher-margin products alongside lower-margin ones
- •Recheck the break-even point whenever costs or prices change