How do you calculate the break-even point?

Divide fixed costs by the contribution margin per unit, which is the price minus the variable cost per unit. With $12,500.00 of fixed costs, a $25.00 price and $10.00 of variable cost per unit, the contribution margin is $15.00 and break-even is $12,500.00 ÷ $15.00 = 833.33 units, or 834 units rounded up. Multiply by the price for break-even revenue: $20,850.00.

Why are the break-even units rounded up?

You can only sell whole units, and at 833.33 units you are still a little short of covering fixed costs. The first whole number of units at which you no longer lose money is 834. Rounding down would leave a small loss. The calculator also shows the exact figure and the revenue at that exact point ($20,833.33) next to the revenue for whole units ($20,850.00). When the division comes out even, as with $12,000.00 of fixed costs (800 units), nothing is rounded.

What is the contribution margin?

It is what is left from each sale after the variable cost, and it goes toward fixed costs and then profit: $25.00 − $10.00 = $15.00 per unit. As a ratio of the price it is 60%. The ratio gives a second route to break-even revenue: fixed costs ÷ ratio = $12,500.00 ÷ 60% = $20,833.33.

What is the margin of safety?

It is how far sales can drop below your expectation before you hit break-even. Expected sales minus break-even sales, here 1,200 − 834 = 366 units, or $9,150.00 of revenue, or 30.5% of expected sales. If you expect fewer units than break-even, such as 500, the calculator reports how far short you are (334 units) instead, and the profit at that volume is a loss (−$5,000.00).

How many units do I need to sell to make a target profit?

Treat the target as extra fixed cost: (fixed costs + target profit) ÷ contribution margin, rounded up. For a $6,000.00 target that is ($12,500.00 + $6,000.00) ÷ $15.00, so 1,234 units. Because of the rounding up, the profit at that volume is slightly above the target: $6,010.00.

What if the price is lower than or equal to the variable cost?

Then the business never breaks even. At a price equal to the variable cost ($10.00 and $10.00) the contribution margin is $0.00, so no number of sales covers the fixed costs; if the price is below it ($8.00 against $10.00) every unit sold deepens the loss by $2.00. The calculator shows a warning rather than a break-even figure. Raise the price or reduce the variable cost.

What counts as a fixed cost and what as a variable cost?

Fixed costs do not change with the number of units you sell in the period, such as rent, salaried staff, insurance and software subscriptions. Variable costs rise with every unit, such as materials, packaging, shipping, sales commissions and card fees. Some costs are mixed; split them into a fixed part and a per-unit part, or put them where they behave most like one or the other.

Does this work for a service business or a subscription?

Yes. Pick whatever you count as a unit: an hour of service, a customer-month, a ticket. The price is what one unit earns, the variable cost is what delivering it costs, and fixed costs are for the same period. A $80.00 hour with $20.00 of variable cost against $6,000.00 a month of fixed costs breaks even at 100 units a month.

What does the break-even model leave out?

It assumes a constant price, a constant variable cost per unit and fixed costs that stay fixed across the volumes you look at, a single product (or a steady mix), and that what you make is what you sell. Real businesses have discounts, step-up costs, taxes and changing mixes, so treat the result as a planning estimate, not a forecast. It is not financial or tax advice.

Is anything I type stored or sent?

No. The calculation runs in your browser and nothing you enter leaves your device.

Break-Even Calculator

Break-even units = fixed costs ÷ (selling price − variable cost per unit). With $12,500.00 of fixed costs, a $25.00 price and $10.00 of variable cost per unit, each unit contributes $15.00 (60% of the price), so break-even is 833.33 units, rounded up to 834 whole units, or $20,850.00 in sales. Enter your fixed costs, price and variable cost per unit and the calculator shows the break-even units and revenue, the contribution margin per unit and as a ratio, the margin of safety for the sales you expect (30.5% in the example, 366 units above break-even), and the units needed to reach a target profit (1,234 units for $6,000.00). Units are always rounded up, because you cannot sell part of a unit and break-even is the first whole unit at which you no longer lose money. If the price is not above the variable cost, the calculator warns you that the business never breaks even.

Updated 2026-10-16Runs in your browser: nothing you enter is uploadedHow this tool works

Break-even: 834 units ($20,850.00 in sales)

Each unit contributes $15.00 (60% of the price) toward $12,500.00 of fixed costs.

Contribution margin per unit: $15.00
Contribution margin ratio: 60%
Break-even units (rounded up): 834
Exact break-even units: 833.33
Break-even revenue: $20,850.00
Revenue at the exact break-even point: $20,833.33
Expected sales: 1,200 units
Profit (loss) at expected sales: $5,500.00
Margin of safety (units): 366
Margin of safety (% of expected sales): 30.5%
Margin of safety (revenue): $9,150.00
Units for $6,000.00 profit: 1,234
Profit at that volume: $6,010.00

Revenue and cost by volume

Revenue (solid line) and total cost (dashed line): where they cross is the break-even point. The same figures are in the table below.

Profit or loss at volumes around break-even, and the figures behind the chart.
Units sold	Revenue	Total cost	Profit (loss)
0	$0.00	$12,500.00	−$12,500.00
417	$10,425.00	$16,670.00	−$6,245.00
626	$15,650.00	$18,760.00	−$3,110.00
834 (break-even)	$20,850.00	$20,840.00	$10.00
1,043	$26,075.00	$22,930.00	$3,145.00
1,251	$31,275.00	$25,010.00	$6,265.00
1,668	$41,700.00	$29,180.00	$12,520.00

The break-even formulas, worked on the example

Each formula applied to $12,500.00 of fixed costs, a $25.00 price and $10.00 of variable cost per unit. Units are rounded up to whole units.
Measure	Formula	Example
Contribution margin per unit	Price − variable cost per unit	$25.00 − $10.00 = $15.00
Contribution margin ratio	Contribution margin ÷ price	$15.00 ÷ $25.00 = 60%
Break-even units	Fixed costs ÷ contribution margin per unit, rounded up	$12,500.00 ÷ $15.00 = 833.33, so 834
Break-even revenue	Break-even units × price (or fixed costs ÷ ratio)	834 × $25.00 = $20,850.00 ($20,833.33 at the exact point)
Margin of safety	Expected sales − break-even sales	1,200 − 834 = 366 units (30.5% of expected sales)
Units for a target profit	(Fixed costs + target profit) ÷ contribution margin per unit, rounded up	($12,500.00 + $6,000.00) ÷ $15.00, so 1,234 units

Break-even units at common cost levels

Each cell is the whole units needed to cover that amount of fixed costs at that contribution margin per unit (price minus variable cost), rounded up.
Fixed costs	$5.00 per unit	$10.00 per unit	$15.00 per unit	$25.00 per unit
$5,000.00	1,000	500	334	200
$10,000.00	2,000	1,000	667	400
$25,000.00	5,000	2,500	1,667	1,000
$50,000.00	10,000	5,000	3,334	2,000

How to calculate your break-even point

Add up your fixed costs. Fixed costs stay the same however many units you sell in the period: rent, salaries, insurance, loan payments. The example uses $12,500.00.
Enter the price and the variable cost per unit. The variable cost is what each extra unit costs you: materials, packaging, per-unit labor and payment fees. At a $25.00 price and $10.00 variable cost, each unit leaves $15.00 to cover fixed costs.
Read the break-even units and revenue. Divide fixed costs by the contribution margin: $12,500.00 ÷ $15.00 = 833.33, rounded up to 834 units. Multiply by the price for the revenue: $20,850.00.
Add the sales you expect. Enter expected sales to get the margin of safety, how far sales can fall before you stop making a profit: 1,200 expected units is 366 above break-even, 30.5% of expected sales.
Set a target profit. Enter the profit you want and the calculator adds it to the fixed costs: $6,000.00 takes 1,234 units and leaves $6,010.00. The table and chart show profit or loss at volumes on either side of break-even.

Frequently asked questions

How do you calculate the break-even point?: Divide fixed costs by the contribution margin per unit, which is the price minus the variable cost per unit. With $12,500.00 of fixed costs, a $25.00 price and $10.00 of variable cost per unit, the contribution margin is $15.00 and break-even is $12,500.00 ÷ $15.00 = 833.33 units, or 834 units rounded up. Multiply by the price for break-even revenue: $20,850.00.
Why are the break-even units rounded up?: You can only sell whole units, and at 833.33 units you are still a little short of covering fixed costs. The first whole number of units at which you no longer lose money is 834. Rounding down would leave a small loss. The calculator also shows the exact figure and the revenue at that exact point ($20,833.33) next to the revenue for whole units ($20,850.00). When the division comes out even, as with $12,000.00 of fixed costs (800 units), nothing is rounded.
What is the contribution margin?: It is what is left from each sale after the variable cost, and it goes toward fixed costs and then profit: $25.00 − $10.00 = $15.00 per unit. As a ratio of the price it is 60%. The ratio gives a second route to break-even revenue: fixed costs ÷ ratio = $12,500.00 ÷ 60% = $20,833.33.
What is the margin of safety?: It is how far sales can drop below your expectation before you hit break-even. Expected sales minus break-even sales, here 1,200 − 834 = 366 units, or $9,150.00 of revenue, or 30.5% of expected sales. If you expect fewer units than break-even, such as 500, the calculator reports how far short you are (334 units) instead, and the profit at that volume is a loss (−$5,000.00).
How many units do I need to sell to make a target profit?: Treat the target as extra fixed cost: (fixed costs + target profit) ÷ contribution margin, rounded up. For a $6,000.00 target that is ($12,500.00 + $6,000.00) ÷ $15.00, so 1,234 units. Because of the rounding up, the profit at that volume is slightly above the target: $6,010.00.
What if the price is lower than or equal to the variable cost?: Then the business never breaks even. At a price equal to the variable cost ($10.00 and $10.00) the contribution margin is $0.00, so no number of sales covers the fixed costs; if the price is below it ($8.00 against $10.00) every unit sold deepens the loss by $2.00. The calculator shows a warning rather than a break-even figure. Raise the price or reduce the variable cost.
What counts as a fixed cost and what as a variable cost?: Fixed costs do not change with the number of units you sell in the period, such as rent, salaried staff, insurance and software subscriptions. Variable costs rise with every unit, such as materials, packaging, shipping, sales commissions and card fees. Some costs are mixed; split them into a fixed part and a per-unit part, or put them where they behave most like one or the other.
Does this work for a service business or a subscription?: Yes. Pick whatever you count as a unit: an hour of service, a customer-month, a ticket. The price is what one unit earns, the variable cost is what delivering it costs, and fixed costs are for the same period. A $80.00 hour with $20.00 of variable cost against $6,000.00 a month of fixed costs breaks even at 100 units a month.
What does the break-even model leave out?: It assumes a constant price, a constant variable cost per unit and fixed costs that stay fixed across the volumes you look at, a single product (or a steady mix), and that what you make is what you sell. Real businesses have discounts, step-up costs, taxes and changing mixes, so treat the result as a planning estimate, not a forecast. It is not financial or tax advice.
Is anything I type stored or sent?: No. The calculation runs in your browser and nothing you enter leaves your device.

How it works

This is cost-volume-profit (CVP) analysis as taught in managerial accounting. Money is handled as whole cents in integer arithmetic, so there is no floating-point error. Contribution margin per unit is the price minus the variable cost per unit; the contribution margin ratio is that margin divided by the price. Break-even units are fixed costs divided by the contribution margin, rounded up to a whole unit, and break-even revenue is those whole units times the price; the calculator also shows the exact (unrounded) units and the revenue at that point, which equals fixed costs divided by the ratio, rounded to the cent. The margin of safety is expected sales minus break-even units (also as revenue, and as a percentage of expected sales); when expected sales are below break-even it shows the shortfall instead. Units for a target profit are (fixed costs + target profit) divided by the contribution margin, rounded up. Profit at any volume is units × contribution margin − fixed costs. The table shows 0%, 50%, 75%, 100%, 125%, 150% and 200% of break-even (of the expected sales, or 100 units, when there is no break-even point), and the chart draws the revenue line (price × units) and the total cost line (fixed costs + variable cost × units) over the same range, with the crossing point marked at the exact break-even. The model assumes a constant price and per-unit variable cost, fixed costs that stay fixed over the range, and one product or a steady sales mix. Amounts with more than two decimals are rounded to the nearest cent, half up. Everything runs in your browser and nothing you type is sent anywhere.

Sources

All tools Home & DIY calculators