Break-even Calculator

The break-even point is the sales level where total revenue exactly covers total costs, so profit is zero. Sell more than this and you make a profit; sell less and you make a loss.

Contribution margin is the selling price of a unit minus its variable cost. It is the amount each sale contributes toward covering your fixed costs and, after those are paid, toward profit.

Cut fixed costs, reduce the variable cost per unit, or raise your price. Any of these widens the contribution margin or shrinks the costs it has to cover, so fewer units are needed.

Fixed costs stay the same regardless of how much you sell, like rent or insurance. Variable costs change with each unit produced or sold, like materials, packaging and per-sale fees.

If the price does not exceed the variable cost, every sale loses money before fixed costs are even considered. The contribution margin is zero or negative, so no number of units can break even.

No. This is a single-product, pre-tax model. For a multi-product business, use a weighted average contribution margin, and treat the result as a planning estimate.