Break-Even Calculator
Determine the number of units you must sell in order to pay your expenses, or the price at which you must break even at a specific volume of sales.
(Fixed Costs + Profit) ÷ (Price − Variable Cost)The volume where you stop losing money
When total revenue and total expense are exactly equal, there is no profit or loss. This is known as break-even. Above that volume, the contribution margin (price minus variable cost) of each more unit immediately drops to profit; below that number, every sale still leaves you short of covering fixed costs. Knowing that figure transforms the ambiguous “are we making money” inquiry into a specific sales goal.
This calculator is bidirectional. It tells you how many units you need to move when you give it a price. It is helpful when the sales quantity is fixed (a venue’s seat count, a production run size) and price is the variable you’re solving for. Instead, give it a target unit volume, and it gives you the price you’d need to charge to break even at that volume.
At a glance
- 2 modes, 1 formulaFind Break-Even Units or Find Required Price, both from the same cost structure.
- Optional profit targetInstead of only covering costs, add a desired profit to see the volume or price required to reach it.
- Contribution margin shownYou can examine the actual contribution of each sale by looking at both the dollar amount and the percentage of the price.
- Flags an impossible break-evenwarns that no volume would ever break even if the price didn’t surpass the variable cost.
Two directions, one card
Change modes based on the quantity you’re trying to figure out, such as how many units to sell or how much to charge.
Find Break-Even Units
Enter your selling price, variable cost per unit, and fixed costs to see how many units you must sell to make a profit or cover your expenses.
Find Required Price
The price you would need to charge to break even at that volume is displayed when you enter your fixed costs, variable cost per unit, and target number of units.
The formula
Break-Even Units = (Fixed Costs + Desired Profit) ÷ (Price − Variable Cost). The denominator is your contribution margin per unit.
Contribution margin
This is the remaining amount from each sale after variable costs are deducted but before fixed costs are paid; it is displayed here as a percentage of price as well as a monetary amount..
Step-by-step sample calculations
Using the same formulas as the calculator above, three possibilities were examined.
Basic break-even, no profit target
“$10,000 in fixed costs, $12 variable cost per unit, selling at $20. How many units to break even?”
Given inputs
- Fixed costs: $10,000
- Variable cost: $12/unit
- Price: $20/unit
Computed outputs
- Contribution margin: $20 − $12 = $8/unit
- Break-even units: $10,000 ÷ $8 = 1,250 units
- Break-even revenue: 1,250 × $20 = $25,000
Adding a target profit
“Same costs and price as Scenario 1, but I want $5,000 in profit on top of covering costs.”
Given inputs
- Fixed costs: $10,000
- Desired profit: $5,000
- Contribution margin: $8/unit
Computed outputs
- Total to cover: $10,000 + $5,000 = $15,000
- Units needed: $15,000 ÷ $8 = 1,875 units
- 625 more units than the plain break-even point
Solving for required price instead
“I have a facility with precisely 500 seats, fixed costs of $10,000, and variable costs of $12 per seat. What should I charge?”
Given inputs
- Fixed costs: $10,000
- Variable cost: $12/unit
- Target units: 500
Computed outputs
- Required price: $12 + ($10,000 ÷ 500) = $32
- Revenue at target: 500 × $32 = $16,000
- Contribution margin: $32 − $12 = $20/unit (62.5% of price)
Where break-even estimates go wrong
Mixing fixed and variable costs together
Salaries and rent are not included in “variable cost per unit,” while commissions or supplies are not included in “fixed costs.” Combining them distorts every outcome and either overstates or understates your contribution margin.
Pricing at or below variable cost
There is no sales volume that breaks even if the price is less than the variable cost per unit; each extra unit sold results in a greater loss. This situation is immediately flagged by the calculator.
Assuming costs stay flat at any volume
Once you surpass certain numbers, real fixed costs frequently increase gradually (a second warehouse, an additional shift), and variable prices may change in response to bulk discounts. This model is helpful for a preliminary estimate that isn’t too distant from your existing scale because it assumes a steady rate throughout.
Forgetting this is pre-tax
In this case, break-even is an operational figure. The real after-tax profit at a particular volume will be less than the pre-tax figures displayed because income tax on any profit above break-even is not taken into account.
Common questions
What counts as a fixed cost vs. a variable cost?+
Why is the “desired profit” field optional?+
What if my selling price is lower than my variable cost?+
Does this work for service businesses, not just products?+
Does this account for taxes?+
Formula references
- 3.2 Calculate a Break-Even Point in Units and Dollars. Principles of Accounting, Volume 2: Managerial Accounting. OpenStax. — the break-even and contribution margin formulas this calculator applies.
- Ch. 3 Why It Matters: Cost-Volume-Profit Analysis. Principles of Accounting, Volume 2: Managerial Accounting. OpenStax. — overview of cost-volume-profit (CVP) analysis and how businesses use it.