Break-Even Calculator
Calculates the exact number of units or revenue needed to cover all fixed and variable costs
Total fixed costs such as rent, salaries, and insurance
Cost to produce or acquire one unit
Price at which you sell one unit
Enter your costs and price to see break-even units
Revenue needed to cover all costs
Selling price minus variable cost per unit
Frequently Asked Questions
What is a break-even point?
The break-even point is where total revenue equals total costs, meaning no profit or loss. It tells you the minimum number of units you need to sell or revenue you need to earn to cover all fixed and variable expenses.
How do I calculate break-even units?
Divide your total fixed costs by the contribution margin per unit (selling price minus variable cost per unit). For example, $10,000 fixed costs with a $20 contribution margin means you need to sell 500 units to break even.
What are fixed costs vs variable costs?
Fixed costs stay the same regardless of sales volume (rent, insurance, salaries). Variable costs change with each unit sold (materials, shipping, commissions). Understanding this split is essential for break-even analysis.
How can I lower my break-even point?
You can lower it by reducing fixed costs, reducing variable costs per unit, or increasing your selling price. Each approach has trade-offs, so consider the impact on demand and quality before making changes.
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