Break-Even Calculator
Calculate how many units you need to sell or revenue needed to cover your costs and start making profit.
Rent, salaries, insurance, etc. - costs that don't change with sales
Materials, labor, shipping - costs per item sold
How much profit do you want to make?
Break-Even Point
0 units
Break-Even Revenue
$0
Contribution Margin
$0 per unit
Contribution Margin %
0%
With Target Profit
Units to Reach Target
0 units
Revenue to Reach Target
$0
Profit at Different Sales Levels
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Understanding Break-Even Analysis
Key Concepts:
- Fixed Costs: Expenses that stay the same regardless of sales (rent, salaries, equipment)
- Variable Costs: Costs that change with each unit sold (materials, shipping, commissions)
- Contribution Margin: Selling Price - Variable Cost (what each sale contributes to covering fixed costs)
- Break-Even Point: Where total revenue equals total costs (profit = $0)
The Formulas:
- Break-Even Units: Fixed Costs / Contribution Margin
- Break-Even Revenue: Fixed Costs / Contribution Margin %
- Contribution Margin: Price - Variable Cost per Unit
- Contribution Margin %: Contribution Margin / Price × 100
Why This Matters:
- Helps set sales targets and pricing strategy
- Shows how changes in costs affect profitability
- Useful for evaluating new products or ventures
- Helps determine minimum viable business scale