Reviewed November 2026 · Estimate only, not financial advice.
The break-even point is where sales exactly cover costs — sell one more unit and you are in profit. Enter your fixed costs, your selling price and the variable cost per unit to find it.
How This Break-Even Calculator Works
Every unit sold contributes its price minus its variable cost toward the fixed costs. The break-even point is the number of units whose total contribution exactly equals the fixed costs. Because you cannot sell a fraction of a unit, the answer is rounded up to the next whole unit.
Contribution margin = Price − Variable cost per unit
Break-even units = Fixed costs ÷ Contribution margin (rounded up)
Break-even revenue = break-even units × price. Fixed costs = rent, salaries, insurance — costs that do not change with sales.
Worked example: Fixed costs $5,000 a month, price $25, variable cost $10 per unit. Contribution margin = $25 − $10 = $15. Break-even units = $5,000 ÷ $15 = 333.33, rounded up to 334 units. Break-even revenue = 334 × $25 = $8,350.
Practical tips
Round up, never down.333 units leaves you $5 short of covering costs. The break-even point is always the next whole unit above the exact figure.
Two levers: price and variable cost.Raising the price by $5 cuts the break-even point by 25% here; cutting variable cost by $5 does the same. Cutting fixed costs helps too, but it is usually the hardest lever to pull.
Re-run it when anything changes.A rent rise, a supplier price change or a discount all move the break-even point. Recompute before any pricing decision.
Break-even is survival, not success.At the break-even point profit is zero. Set your sales target above it — and know how far above it you need to be to pay yourself.
Frequently Asked Questions
What is the break-even point?
The level of sales at which total revenue exactly covers total costs — fixed plus variable. Below it you lose money; above it you make a profit.
What are fixed and variable costs?
Fixed costs do not change with sales (rent, salaries, insurance). Variable costs change with each unit sold (materials, packaging, payment fees).
Why is the answer rounded up?
You cannot sell a fraction of a unit. If the exact break-even is 333.33 units, 333 units still leaves a small loss — 334 is the first profitable quantity.
What is contribution margin?
Price minus variable cost per unit — the amount each sale contributes toward fixed costs and profit. A bigger margin means a lower break-even point.
How does a price change affect break-even?
Raising the price increases the contribution margin, so fewer units are needed. Cutting the price has the opposite effect — check the break-even point before any discount.
Is this financial advice?
No. This is a planning estimate only, not financial advice.
