A familiar situation
Before launching a product or service, compare fixed costs with the contribution left from each sale after variable costs. Change price or unit cost to see how many sales the break-even point requires.
How to use this calculator
- Enter fixed costs, selling price / unit, variable cost / unit.
- Select Calculate to see the answer and its breakdown.
- Keep a scenario, change an input and compare the results.
Use consistent units and check the assumptions below before applying the result.
How break-even is calculated
Fixed costs stay the same within the period you are modelling, while variable costs increase with each sale. The difference between selling price and variable cost is the contribution margin. Each sale uses that contribution to cover fixed costs; after those costs are covered, additional contribution becomes operating profit. A zero or negative contribution cannot cover fixed costs, so the calculator requires a selling price greater than the variable cost.
Break-even units = fixed costs ÷ (selling price − variable cost per unit), rounded upWith fixed costs of 10,000, a selling price of 50 and a variable cost of 30, each unit contributes 20. You need to sell 500 units to cover fixed costs.
Assumptions & useful context
Assumes constant selling price and variable cost. All production is sold; taxes and financing costs must be included in your cost inputs if relevant.
Financial projections use your assumptions. Actual returns, lender terms, fees and tax rules can differ; these results do not guarantee a future outcome.
Frequently asked questions
Which period should I use?
Use one consistent period, such as a month or year. Enter only the fixed costs attributable to that period.
What if I sell multiple products?
A single-product model cannot account for changing sales mix. Use a weighted average contribution based on your expected mix, or calculate each product separately.