Break Even Calculator
Calculate your business's break-even point: the units you need to sell to cover all costs, based on your fixed costs, variable cost per unit, and selling price.
Results
Break even units
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Break even revenue
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Break Even = Fixed Costs / (Price - Variable Cost)
Break Even Calculator
The break-even point is the sales volume at which revenue exactly equals total costs — the point from which every unit sold starts generating profit. It's one of the first numbers any business should calculate before launching a product, since it shows whether the expected sales volume is realistic.
The formula is: break-even point (units) = fixed costs / (selling price − variable cost per unit). The difference between the selling price and the variable cost is called the contribution margin: every unit sold above the break-even point contributes that entire margin to profit, since fixed costs are already covered.
An example: if your monthly fixed costs are €3,000, the variable cost per unit is €8, and the selling price is €20, the contribution margin is €12 per unit, and the break-even point is 3,000/12 = 250 units per month. Selling fewer than 250 units, the business loses money; from 251 onward, each additional unit generates €12 of profit.
Fixed costs are those that don't change with production volume (rent, fixed salaries, insurance), while variable costs do (raw materials, sales commissions). Correctly classifying each cost is key to an accurate break-even calculation; a common mistake is treating a cost as fixed when it actually scales with sales.
Preguntas frecuentes
How is the break-even point calculated?
Divide total fixed costs by the contribution margin per unit (selling price minus variable cost per unit).
What is the contribution margin?
It's the difference between the selling price and the variable cost of each unit; it represents how much each sale contributes to covering fixed costs and, after that, profit.
What happens if I sell below the break-even point?
The business runs at a loss, because revenue doesn't cover the total fixed and variable costs.
How do I calculate the break-even point in revenue, not units?
Multiply the break-even units by the selling price, or divide fixed costs by the contribution margin expressed as a percentage of the selling price.
What's the difference between fixed and variable costs?
Fixed costs don't change with sales volume (rent, fixed salaries); variable costs do, rising or falling with units produced or sold (raw materials, commissions).
How can I lower my break-even point?
By reducing fixed costs, lowering the variable cost per unit, or raising the selling price, as long as the market allows it without losing too many sales.
Does exceeding the break-even point guarantee profit?
Yes, every unit sold beyond the break-even point generates profit equal to the contribution margin, assuming fixed and per-unit variable costs stay constant.
Does this work for businesses with several products?
The basic calculation assumes a single product or an average contribution margin; for several products with different margins, it's better to calculate a weighted break-even point based on the sales mix.