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Break-Even Calculator

Updated · By the CalculatorDash editorial team · How we check our maths

Quick answer

Break-even units equal fixed costs divided by (price − variable cost per unit). With $5,000 of monthly fixed costs, a $50 price and $30 of variable cost, each sale contributes $20, so you need 250 sales a month to break even.

Break-even point

$
$
$
$

Units to sell per month

250

Shows 0 if each sale loses money: raise the price or cut variable costs.

Revenue needed
$12,500
Contribution per unit
$20.00
Contribution margin ratio
40%
Units per day (30-day month)
8.3

How this calculator works

Every sale contributes something towards your fixed costs: the price minus what that unit cost you to make or deliver. The break-even point is simply the number of contributions it takes to cover rent, salaries and everything else that does not change with volume.

Add a target profit to see what it takes to pay yourself, not just survive. If the answer looks impossible, the fix is usually a higher price or a lower variable cost, not more volume.

The formula

Contribution per unit
price − variable cost
Break-even units
(fixed costs + target profit) ÷ contribution per unit
Break-even revenue
break-even units × price

Worked example

A candle maker has $2,400 of monthly fixed costs, sells candles at $28 and spends $9 on wax, jar, wick and shipping. Each candle contributes $19, so break-even is 2,400 ÷ 19 = 127 candles a month. To earn $3,000 on top, they need 285 candles.

Tips

  1. 01Recalculate whenever you change prices, suppliers or rent.
  2. 02A small price increase often moves break-even more than a big marketing push.
  3. 03For service businesses, a 'unit' can be a job, an hour or a client.

Frequently asked questions

What is the break-even formula?

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). Multiply by price for break-even revenue.

What counts as a fixed cost?

Costs that do not change with sales volume in the short term, such as rent, salaries, insurance, software subscriptions and loan repayments.

What is contribution margin?

The amount each sale contributes to fixed costs and profit: price minus variable cost. As a ratio, divide it by the price.

How can I lower my break-even point?

Raise prices, reduce variable costs per unit, or cut fixed costs. Raising prices usually has the largest effect.