Break-Even Calculator

The break-even point is the exact number of units you must sell for total revenue to equal total costs. Below that number you lose money; above it you earn profit. The calculator finds it with two inputs: fixed costs divided by the contribution margin per unit (price minus variable cost per unit). For example, $10,000 in fixed costs with a $4 contribution margin breaks even at 2,500 units.

Contribution margin per unit is your selling price minus the variable cost of producing or delivering one unit. It represents how much each sale contributes toward covering fixed costs before any profit is earned. The calculator also shows the contribution margin ratio (contribution margin as a percentage of price), which tells you how many cents of every dollar of revenue go toward fixed costs and profit.

If your price does not exceed variable cost, every additional unit you sell deepens the loss, and no sales volume can ever recover it. The contribution margin is zero or negative, so there is no break-even point to compute. The calculator returns no result in that case rather than showing a number that would be mathematically meaningless.

Margin of safety measures how far your target sales volume sits above the break-even point. The calculator shows it in units (target units minus break-even units) and as a percentage of your target volume. A 20% margin of safety means sales could fall by 20% before you start losing money, a useful benchmark when stress-testing a budget or pricing change.

Break-even analysis is a floor check, not a pricing strategy. It tells you the minimum volume required at a given price, but it cannot tell you what the market will bear or whether demand exists at that volume. Use it alongside competitive research and demand estimates, and treat the result as a minimum threshold rather than a target.