Break-Even Calculator
Calculate break-even units, revenue, contribution margin, target-profit units, and safety margin scenarios.
Last reviewed: June 2026Safety Margin Analysis
| Sales Level | Units | Revenue | Profit / Loss | Safety Margin |
|---|
Quick Answer
Your break-even point is the sales volume where revenue equals costs — no profit, no loss. In units, it's fixed costs divided by the contribution margin (price minus variable cost per unit). With $10,000 in fixed costs and a $20 margin per unit, you break even at 500 units. Enter your costs and price above to find yours.
What this break-even calculator estimates
This break-even calculator estimates how many units must be sold before total revenue covers total fixed and variable costs. It reports break-even units, break-even revenue, contribution margin per unit, contribution margin ratio, units needed for a target profit, and a safety-margin table for sales levels around the break-even point.
The core formula is: contribution margin per unit = selling price per unit - variable cost per unit. Break-even units = fixed costs / contribution margin per unit. Break-even revenue = break-even units x selling price. The calculator rounds required units up because most products, jobs, or clients cannot be sold as a fraction.
How to classify costs
Fixed costs are costs that stay roughly constant over the period and relevant volume range you are modeling: rent, salaried labor, software subscriptions, base utilities, insurance, loan payments, equipment leases, or other overhead. Variable cost per unit is the cost that rises with each unit sold: materials, payment processing, packaging, shipping, sales commissions, hourly production labor, or per-client delivery costs.
Mixed costs need judgment. If a cost has both fixed and variable parts, separate those parts before entering the values. For example, a delivery service may have a fixed monthly vehicle lease plus variable fuel and maintenance per delivery. This page assumes one product or a stable average unit mix; multi-product businesses should use a weighted average contribution margin by sales mix.
Worked default example
With the default inputs, fixed costs are $10,000 per month, variable cost is $25 per unit, and selling price is $50 per unit. Contribution margin is $25 per unit and the contribution margin ratio is 50%. The break-even point is 400 units, and break-even revenue is $20,000. If target profit is left at $0, the target-profit units match the break-even units.
If fixed costs are $12,000, variable cost is $18, selling price is $45, and target profit is $6,000, contribution margin is $27 per unit. Break-even is 445 units after rounding up, break-even revenue is $20,025, and the target-profit volume is 667 units.
Reading the safety-margin table
The safety-margin table shows sales levels around the break-even point. Below break-even, profit/loss is negative because contribution has not yet covered fixed costs. At break-even, contribution covers fixed costs. Above break-even, each additional unit contributes roughly the contribution margin toward operating profit under the model assumptions.
When the calculator shows an error
If variable cost per unit is greater than or equal to selling price per unit, contribution margin is zero or negative. In that case, selling more units will not cover fixed costs. The practical response is to raise price, lower variable cost, change the product mix, reduce fixed costs, or revisit the model assumptions.
Model limits
Break-even analysis is a simplified cost-volume-profit model. It assumes constant selling price, constant variable cost per unit, fixed costs that stay fixed over the relevant volume range, no capacity constraints, no demand response to price changes, no taxes, no financing costs, and no working-capital timing. It is best used as a planning screen and sensitivity check, not as a full budget or cash-flow forecast.
Sources and further reading
Useful references include the U.S. Small Business Administration guide to break-even point calculations, OpenStax contribution margin guidance, OpenStax guidance on break-even units and dollars, and University of Missouri Extension material on break-even pricing, revenue, and units.
Frequently Asked Questions
Quick reference
| Output | Formula or meaning |
|---|---|
| Contribution margin | Selling price per unit minus variable cost per unit. |
| Break-even units | Fixed costs divided by contribution margin, rounded up. |
| Break-even revenue | Break-even units multiplied by selling price. |
| Target-profit units | Fixed costs plus target profit, divided by contribution margin. |