Overview
Enter total fixed costs, the selling price per unit, and the variable cost per unit to find the break-even point - the number of units (and total revenue) needed to cover all costs before a business starts turning a profit. The calculation is built on the contribution margin (selling price minus variable cost per unit), which represents how much each unit sold contributes toward covering fixed costs once its own variable cost is paid; dividing total fixed costs by that contribution margin gives the break-even quantity, and multiplying by the selling price gives the break-even revenue. The contribution margin ratio (contribution margin as a percentage of price) is also shown, since it's useful for comparing products with very different price points. If the selling price doesn't exceed the variable cost per unit, the tool reports an error rather than a nonsensical negative break-even point, since no volume of sales could ever recover fixed costs under those numbers. Useful for pricing decisions, evaluating a new product line, or sanity-checking a business plan's assumptions. Runs entirely client-side, and this is an informational estimate, not financial advice.
Best for: Figuring out how many units a product must sell before it becomes profitable
How to use this tool
- Enter fixed costs, price, and variable cost. Total fixed costs, the selling price per unit, and the variable cost to produce or deliver one unit.
- The contribution margin is calculated. Selling price minus variable cost per unit - how much each sale contributes toward fixed costs.
- Read the break-even point. The number of units and total revenue needed to exactly cover fixed costs, with zero profit or loss.
Frequently asked questions
The tool reports an error instead of a break-even point, because in that situation every unit sold actually loses money - there's no contribution toward fixed costs at all, let alone a volume of sales that could ever recover them. The selling price must exceed the variable cost per unit for a break-even point to exist.
The contribution margin is a dollar amount per unit (price minus variable cost). The contribution margin ratio expresses that same amount as a percentage of the selling price, which makes it easier to compare products or services with very different price points on equal footing.
No - break-even revenue is the point where total revenue exactly equals total costs (fixed plus variable), meaning zero profit and zero loss. Selling any amount beyond the break-even quantity is what generates actual profit, since fixed costs are already fully covered at that point.