Break-Even Calculator
Determine the exact sales volume and gross revenue required to fully cover fixed and variable operating costs.
About Break-Even Analysis
Break-even analysis identifies the exact volume of unit sales needed for total revenue to equal total business expenses, generating zero profit and zero loss.
Formulas
- Contribution Margin per Unit: Sale Price – Variable Cost
- Break-Even Units: Fixed Costs / Contribution Margin per Unit
- Break-Even Revenue: Break-Even Units × Sale Price
Worked Example
If monthly rent and salaries total $25,000 (fixed costs), with an item sold for $75 and costing $35 to manufacture (variable cost):
- Contribution margin: $75 – $35 = $40/unit
- Break-even threshold: $25,000 / $40 = 625 units
- Break-even gross sales: 625 × $75 = $46,875
Frequently Asked Questions
What are typical fixed costs?
Fixed costs remain constant regardless of output volume, including commercial leases, corporate insurance, software subscriptions, and salaried payroll.
What are variable costs?
Variable costs fluctuate directly with production volume, such as raw materials, packaging, credit card swipe fees, and shipping expenses.
How can a business lower its break-even point?
By increasing the sales price per unit, negotiating lower wholesale material costs, or trimming fixed operational overhead.
What is the Contribution Margin Ratio?
It is the percentage of each sales dollar remaining after variable costs to help cover fixed operational overhead.
Calculate in three steps
- 1Enter your valuesUse the fields above and check the units shown beside each input.
- 2Run the calculationSelect Calculate to refresh the result with your latest values.
- 3Review or shareCompare the result, reset the form, print it, or share this page.