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Break-Even Calculator

Calculate the break-even point in units and revenue for your business.

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Formula

Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)

Divide total fixed costs by the contribution margin (price minus variable cost per unit).

Worked Example

Fixed Costs: $10,000, Price per Unit: $50, Variable Cost: $30 Step 1: Contribution margin = 50 - 30 = $20 Step 2: Break-even units = 10,000 / 20 = 500 units Step 3: Break-even revenue = 500 × $50 = $25,000 Result: 500 units / $25,000 revenue

What Is Break-Even Analysis?

Break-even analysis determines the point at which total revenue equals total costs, meaning no profit or loss. It is a fundamental tool for business planning, pricing decisions, and financial forecasting. The break-even point can be expressed in units (how many items you need to sell) or in revenue (how much money you need to generate).
  • Break-Even Units = Fixed Costs / (Selling Price - Variable Cost per Unit)
  • The difference between selling price and variable cost is called the contribution margin
  • Lowering fixed costs or increasing the contribution margin reduces the break-even point
  • Break-even analysis assumes costs are linear and the selling price stays constant

Every business should know its break-even point. It answers the critical question: how much do I need to sell before I start making a profit?

You can also calculate changes using our Profit Margin Calculator, Pricing Calculator or Unit Economics Calculator.

Frequently Asked Questions

What is the break-even point?

The point where total revenue equals total costs.no profit, no loss.

What are fixed vs variable costs?

Fixed costs stay the same regardless of output (rent, salaries). Variable costs change with production volume (materials, shipping).

How can I lower my break-even point?

Reduce fixed costs, increase prices, or reduce variable costs per unit.

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Profit Margin CalculatorPricing CalculatorUnit Economics Calculator

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