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Break-Even Calculator
Find the exact point where total revenue equals total costs
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Cost & Price Inputs
Rent, salaries, insurance — costs that don't change with output
Raw materials, direct labour — costs per unit produced
Must be greater than variable cost per unit
Target Profit Analysis
Units needed to achieve a profit goal
📖 Key Formulas
CM / Unit = Selling Price − Variable Cost
CM Ratio = CM / Selling Price × 100
BEP Units = Fixed Costs ÷ CM per Unit
BEP Revenue = BEP Units × Selling Price
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Enter your fixed costs, variable cost, and selling price
Break-even point, chart, and scenarios will appear here
Calculating…
Break-Even Point
units
Revenue needed:
Exact: units → rounded up to next whole unit
CM per Unit
CM Ratio
Fixed Costs
total
Var. Cost/Unit
per unit
CM / Unit
contribution
CM Ratio
of revenue
Break-Even Chart
Fixed Cost
Total Cost
Revenue
BEP
Key Metrics
Break-Even Units (exact)
Break-Even Units (rounded up)
Break-Even Revenue
Total Variable Cost at BEP
Total Cost at BEP
Contribution Margin per Unit
Contribution Margin Ratio
🎯 Target Profit Analysis
Target Profit
Units Needed
Revenue Needed
units above break-even point ( profit per unit above BEP)
Profit / Loss Scenarios
Units Sold
Revenue
Total Cost
Profit / Loss
★ BEP
Contribution margin and the break-even formula
The calculation rests on contribution margin. Subtract the variable cost per unit from the selling price per unit and you get the contribution margin per unit: the cash each sale leaves after the direct costs of producing it. Divide that margin by the selling price and multiply by 100 for the contribution margin ratio, expressed as a percentage of revenue.
Break-even in units is total fixed costs divided by the contribution margin per unit. Because you cannot sell a fraction of a unit, the result is rounded up, and break-even revenue is that rounded unit count multiplied by the selling price. The exact fractional figure is shown separately to four decimal places for anyone who needs it.
If you enter a desired profit, the same logic applies with the profit treated as an additional fixed cost: units required equals fixed costs plus target profit, divided by the contribution margin per unit, rounded up. The units above break-even are the difference between the two counts.
Where the selling price is equal to or below the variable cost, the margin is zero or negative and no volume can ever cover fixed costs. The tool reports that rather than returning a meaningless number.
Break-even in units is total fixed costs divided by the contribution margin per unit. Because you cannot sell a fraction of a unit, the result is rounded up, and break-even revenue is that rounded unit count multiplied by the selling price. The exact fractional figure is shown separately to four decimal places for anyone who needs it.
If you enter a desired profit, the same logic applies with the profit treated as an additional fixed cost: units required equals fixed costs plus target profit, divided by the contribution margin per unit, rounded up. The units above break-even are the difference between the two counts.
Where the selling price is equal to or below the variable cost, the margin is zero or negative and no volume can ever cover fixed costs. The tool reports that rather than returning a meaningless number.
Worked example: a product with 24,000 of fixed costs
Suppose fixed costs are 24,000 a year, the selling price is 60 per unit and the variable cost is 34 per unit.
The contribution margin per unit is 60 minus 34, or 26. The contribution margin ratio is 26 divided by 60, multiplied by 100, which is 43.33 percent. Break-even in units is 24,000 divided by 26, or 923.08, rounded up to 924 units. Break-even revenue is 924 multiplied by 60, which is 55,440.
Check it: at 924 units, revenue is 55,440 and total cost is 24,000 of fixed costs plus 924 multiplied by 34, or 31,416, giving 55,416. Profit is 24, marginally positive, which is exactly what rounding up should produce.
Now add a target profit of 13,000. Units required are 24,000 plus 13,000, divided by 26, which is 1,423.08, rounded up to 1,424 units, or 85,440 in revenue. That is 500 units above break-even, which makes intuitive sense: 500 units at a margin of 26 each is 13,000. The scenario table would show the loss shrinking as volume rises, crossing into profit at 924.
The contribution margin per unit is 60 minus 34, or 26. The contribution margin ratio is 26 divided by 60, multiplied by 100, which is 43.33 percent. Break-even in units is 24,000 divided by 26, or 923.08, rounded up to 924 units. Break-even revenue is 924 multiplied by 60, which is 55,440.
Check it: at 924 units, revenue is 55,440 and total cost is 24,000 of fixed costs plus 924 multiplied by 34, or 31,416, giving 55,416. Profit is 24, marginally positive, which is exactly what rounding up should produce.
Now add a target profit of 13,000. Units required are 24,000 plus 13,000, divided by 26, which is 1,423.08, rounded up to 1,424 units, or 85,440 in revenue. That is 500 units above break-even, which makes intuitive sense: 500 units at a margin of 26 each is 13,000. The scenario table would show the loss shrinking as volume rises, crossing into profit at 924.
Using the result, and where the model simplifies
The contribution margin ratio is often the most useful number on the page. At 43.33 percent, every extra unit of revenue contributes about 43 pence or cents towards fixed costs and profit. It also shows how sensitive the business is to price: a five percent price cut removes a far larger slice of contribution than it does of revenue, pushing break-even volume up sharply.
The model assumes fixed costs stay fixed and variable cost per unit stays constant at every volume. Neither holds indefinitely. Fixed costs step up when you need a second machine, a bigger unit or another member of staff, and variable costs usually fall with bulk purchasing. Treat the break-even figure as valid over a limited range of output rather than at any scale.
Be careful about how you classify costs. Salaries for permanent staff are fixed, piece rates and materials are variable, and things like electricity are partly both. Misclassifying a large cost distorts the answer more than any rounding. The calculation also ignores timing, so a business can be above break-even on paper and still short of cash if customers pay slowly. This is general information for planning, not accounting or financial advice.
The model assumes fixed costs stay fixed and variable cost per unit stays constant at every volume. Neither holds indefinitely. Fixed costs step up when you need a second machine, a bigger unit or another member of staff, and variable costs usually fall with bulk purchasing. Treat the break-even figure as valid over a limited range of output rather than at any scale.
Be careful about how you classify costs. Salaries for permanent staff are fixed, piece rates and materials are variable, and things like electricity are partly both. Misclassifying a large cost distorts the answer more than any rounding. The calculation also ignores timing, so a business can be above break-even on paper and still short of cash if customers pay slowly. This is general information for planning, not accounting or financial advice.
Frequently Asked Questions
Divide total fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit. With 24,000 of fixed costs and a 26 margin, break-even is 923.08 units, rounded up to 924. Multiply that unit count by the selling price to get break-even revenue.
Contribution margin is what remains from each sale after its variable costs, so it is the amount available to cover fixed costs and then generate profit. Expressed as a ratio of the selling price, it shows how much of each unit of revenue is genuinely productive, and drives how quickly profit grows once you pass break-even.
Fixed costs do not change with output: rent, insurance, permanent salaries, software subscriptions. Variable costs rise with each unit sold: materials, packaging, payment processing fees, piece-rate labour, shipping. Semi-variable costs such as utilities should be split, with the standing element treated as fixed and the usage element as variable.
Add the target profit to your fixed costs and divide by the contribution margin per unit. Enter a desired profit figure and the tool does this for you, also reporting how many units that sits above break-even. A 13,000 target on a 26 margin needs 500 units more than break-even.
Because the selling price is at or below the variable cost per unit, making the contribution margin zero or negative. Every additional sale then increases the loss, so no volume covers fixed costs. The only fixes are raising the price or cutting the variable cost per unit until the margin is positive.