Break-even calculator

How to use

The break-even point is the quantity that must be sold for revenue to cover every cost, with no profit and no loss. It comes from the contribution margin — what each unit leaves after paying its own variable cost — and shows how much effort is needed before the business starts to earn.

• Know how many units a month pay for the store's structure.
• Decide whether a price covers fixed costs at the volume that actually exists.
• Plan the effect of cutting fixed cost or raising the price.

1. Enter the total fixed costs for the period: rent, payroll, software, energy.
2. Enter the sale price per unit.
3. Enter the variable cost per unit: materials, packaging, selling fee.
4. The result shows the contribution margin, the break-even units and the matching revenue.

Formula

Contribution margin = price − variable cost · Units = fixed costs ÷ contribution margin

Example

Fixed costs of 1,000, a price of 50 and a variable cost of 30 give a contribution margin of 20. Break-even is 50 units, or 2,500 in revenue.

Limitations

• If the contribution margin is zero or negative there is no break-even point: each sale adds to the loss, so the unit count stays blank.
• The result is the minimum to break even, not a sales target.
• A mix of products with different margins must be calculated per line and summed.

Frequently asked questions