Break-even analysis shows how many units you must sell before revenue covers all costs. It is essential for pricing decisions, launch planning, and understanding your sales target.
How to use this calculator
- Enter total fixed costs (rent, salaries, insurance, etc.).
- Enter variable cost per unit (materials, shipping, commissions).
- Enter your selling price per unit.
- Enter your expected or current sales volume to compare against break-even.
- Review break-even units, revenue, scenario analysis, and the revenue-versus-cost chart.
Formula
Contribution margin per unit = Selling price − Variable cost. Break-even units = Fixed costs ÷ Contribution margin. Break-even revenue = Break-even units × Selling price.
Example
With $12,000 in fixed costs, $18 variable cost, and $45 selling price, you break even at about 444 units ($20,000 in revenue).
Frequently asked questions
How is this different from the Break-Even Sales calculator?
This calculator uses classic unit-based break-even (fixed + variable per unit). Break-Even Sales models monthly orders for service businesses with average order values.
What if my selling price equals variable cost?
You cannot break even — each unit contributes zero toward fixed costs. Raise price or reduce variable cost.
Should fixed costs include owner salary?
Include any cost that does not change with each unit sold. Many owners include a modest salary in fixed costs for realistic planning.
Does break-even account for discounts?
No. Use your average selling price after typical discounts, or run the calculation again with a lower price to stress-test.