Break-Even Calculator
Enter your fixed costs, the selling price per unit and the variable cost per unit, and see how many units you must sell, and how much revenue that is, before you stop losing money. Add a profit target to see the units you need to earn it, and an expected sales figure to see your profit and margin of safety. Everything runs in your browser.
Each unit sold adds 15.00 toward your 5,000.00 of fixed costs. After 334 units every further sale is profit.
Break-even analysis assumes the price, the variable cost per unit and the fixed costs stay the same at every sales level, which real businesses only approximate. Break-even units are rounded up because you cannot sell part of a unit. Break-even revenue is the exact point, so it can be a little lower than the units times the price. It is a planning estimate, not accounting or financial advice.
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Math & MoneyAbout the Break-Even Calculator
Your break-even point is the sales level where total revenue equals total cost, so profit is exactly zero. Each unit you sell brings in its price and costs its variable cost, so it adds a contribution of price minus variable cost toward your fixed costs. With 5,000 of fixed costs, a price of 25 and a variable cost of 10, the contribution is 15 per unit, or 60% of the price. Dividing 5,000 by 15 gives 333.33 units, so you need 334 whole units to be at or above break-even. The break-even revenue is the fixed costs divided by the contribution margin ratio: 5,000 divided by 0.60 is 8,333.33. Because you cannot sell part of a unit, the revenue from 334 whole units is 8,350.00, slightly more than the exact point. To plan for a profit, add the profit you want to the fixed costs before dividing: 3,000 of profit needs (5,000 + 3,000) / 15, which is 534 units. If you also enter the units you expect to sell, the tool shows your expected profit and the margin of safety, the share of expected sales that you could lose before reaching break-even. All figures are worked out in whole cents, so there is no rounding drift. Nothing you enter is uploaded.
What is the break-even formula?▾
Break-even units equal fixed costs divided by the contribution per unit, where the contribution is the selling price minus the variable cost per unit. With 5,000 of fixed costs, a price of 25 and a variable cost of 10, that is 5,000 / 15, or 333.33 units, so 334 whole units.
How do I calculate break-even revenue?▾
Divide the fixed costs by the contribution margin ratio, which is the contribution divided by the price. With a 60% ratio, 5,000 of fixed costs gives 5,000 / 0.60, or 8,333.33 of revenue. You can also multiply the break-even units by the price, but that gives a slightly higher figure when the units are rounded up.
What are fixed costs and variable costs?▾
Fixed costs stay the same however much you sell in the period, such as rent, salaries and software subscriptions. Variable costs rise with each unit, such as materials, packaging, shipping and payment fees. Costs that are partly both should be split between the two.
What is the margin of safety?▾
It is how far your expected sales can fall before you reach break-even, as a share of the expected sales. If you expect to sell 500 units and break even at 333.33 units, your sales could fall by 33.33% before you stopped making a profit.
Why does it say there is no break-even point?▾
If the selling price is equal to or lower than the variable cost per unit, each sale adds nothing or loses money, so no number of sales can cover the fixed costs. Raise the price, lower the variable cost, or both.