Break-Even Calculator

Find exactly how many units you must sell — and how much revenue that means — to cover all fixed and variable costs.

Inputs

Fixed costs / monthrent, salaries

Price per unit

Variable cost / unitmaterials, fees

Results

Break-even units

706

Break-even revenue

$31,764.71

Contribution / unit

$17.00

Contribution margin

37.8%

If price barely covers variable cost, no volume will save you — contribution margin must be positive. Raise price or cut variable cost first.

Comprehensive Guide & Formulas

By CalcSuite Editorial TeamUpdated 17 October 20268 min read

Direct Summary / AI Overview

Units & revenue to profit

Key Takeaways & Benchmarks

✓Break-even units = fixed costs ÷ (price − variable cost per unit).
✓Contribution margin must be positive or break-even is impossible.
✓Small price increases cut the break-even target disproportionately.
✓Include the founder's living salary in fixed costs.
✓Break-even is an accounting target — cash timing can still kill you.

How break-even analysis works

Every business has costs that exist whether it sells anything or not — rent, salaries, software. Each sale chips away at those fixed costs by its contribution margin (price minus variable cost). The break-even point is where the chipping-away is exactly done: total contribution equals total fixed costs.

Sell one unit less and you lose money; one unit more and you profit. That knife-edge is why break-even is the first number serious founders compute — it turns vague 'we need more sales' into a concrete monthly target the whole team can aim at.

1
Enter fixed costs
Monthly costs that don't change with volume: rent, salaries, subscriptions.
2
Set price per unit
Your selling price.
3
Enter variable cost per unit
Costs that scale with each sale: materials, fees, packaging.
4
Read your target
Units and revenue needed to break even, plus contribution margin.

The formula

"Contribution margin / unit = price − variable cost per unit"

"Break-even units = fixed costs ÷ contribution margin per unit"

"Break-even revenue = break-even units × price"

Worked example

Fixed costs of $12,000/month, a $45 price and $28 variable cost give a $17 contribution per unit. Break-even = $12,000 ÷ $17 = 706 units (rounded up), or $31,765 in monthly revenue. At 800 units the business earns 94 × $17 = $1,598 profit.

Now raise the price 10% to $49.50: contribution becomes $21.50 and break-even falls to 559 units. That single pricing decision removes 147 units from the monthly target — the difference between a stressful month and a comfortable one.

Lowering your break-even point

▸Raise prices: the fastest lever, since price flows directly into contribution margin.
▸Cut variable costs: renegotiate suppliers, reduce packaging, trim per-unit fees.
▸Trim fixed costs carefully: cancelling unused software and renegotiating rent lower the bar permanently.
▸Beware volume-only plans: selling more at a thin margin just scales the stress.
▸Re-run this monthly — costs creep and yesterday's break-even is rarely today's.

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Frequently asked questions

How do you calculate the break-even point?+

Divide total fixed costs by the contribution margin per unit (price minus variable cost). With $12,000 in fixed costs, a $45 price and $28 variable cost, each unit contributes $17 — so you need 706 units ($31,765 in revenue) to break even. This calculator runs the full analysis instantly.

What is contribution margin?+

The amount each unit sold contributes toward covering fixed costs: price minus variable cost per unit. It is the engine of break-even math — once cumulative contribution covers fixed costs, every additional unit is profit. Track it alongside your Profit Margin to keep pricing honest.

What is the difference between fixed and variable costs?+

Fixed costs (rent, salaries, insurance) don't change with sales volume; variable costs (materials, payment fees, packaging) rise with each unit sold. Misclassifying costs is the most common break-even error — owner salaries, for instance, are fixed even though they feel tied to output.

Can a business break even but still fail?+

Yes. Break-even covers accounting costs, not cash timing — if customers pay in 60 days but suppliers demand 15, you can be profitable on paper and insolvent in practice. Break-even also ignores the owner's needed salary and debt repayments. Pair this with the Runway Calculator for the cash view.

How does price affect the break-even point?+

Dramatically, because price flows straight into contribution margin. Raising price from $45 to $50 (with $28 variable cost) lifts contribution from $17 to $22 and cuts break-even units by 23%. Small price increases are the highest-leverage move in break-even analysis.

What if my variable cost is higher than my price?+

Then contribution margin is negative and break-even is mathematically impossible — every sale loses money. No volume fixes this. You must raise the price, cut variable costs, or discontinue the product. This is the single most important thing break-even analysis reveals.

How do I calculate break-even for multiple products?+

Use a weighted-average contribution margin based on your sales mix. If product A contributes $20 at 60% of sales and product B contributes $10 at 40%, the average is $16 per unit — divide fixed costs by $16. Shifts in sales mix move the break-even point even when total revenue looks stable.

Should I include my salary in fixed costs?+

Yes — include the salary you need to live on. Founders who exclude their own pay compute a break-even point for a hobby, not a business. If the resulting target looks unreachable, that is valuable information before you invest further, not after.