Break-Even Calculator
Any country Currency-neutral arithmetic. Enter figures in your own currency; no country tax rules are applied.
Breakeven calculator: fixed costs, price and variable cost per unit give the units and revenue to break even, the contribution margin and your margin of safety.
Educational estimate only. Not a lending decision. Your numbers stay in this browser.
Results
How to read this: the verdict describes how much room your numbers leave, not a decision or an offer. Change any input to see how much the result moves.
Assumptions and formula
The standard cost-volume-profit model. Each unit sold contributes its price less its variable cost toward fixed costs; break-even units are fixed costs divided by that contribution, and break-even revenue is fixed costs divided by the contribution margin ratio. A target profit is added to fixed costs and the same division gives the volume that reaches it.
The model holds fixed costs constant across the volume range and the variable cost constant per unit, which is true near your current scale and less true far from it — a second shift or a bulk discount changes both. The sensitivity rows move price or variable cost by 10% one at a time so you can see which the break-even point is more exposed to; a price cut hurts more than the same cut in cost, because it comes straight off the contribution.
Worked example
With $10,000 of monthly fixed costs, a $50 price and $30 of variable cost, each sale contributes $20 — 40% of the price — so break-even is 500 units, or $25,000 of revenue. To make $4,000 profit you need 700 units. Selling 800 gives a margin of safety of 300 units, 37.5%. Cutting the price 10% to $45 drops the contribution to $15 and lifts break-even to 667 units.
Frequently asked questions
How is the break-even point calculated?
Divide fixed costs by the contribution margin per unit — the price less the variable cost. With $10,000 of monthly fixed costs, a $50 price and $30 of variable cost, each sale contributes $20, so break-even is 500 units, or $25,000 of revenue. The revenue figure can also be found directly: fixed costs divided by the contribution margin ratio, here 40%.
What is the difference between fixed and variable costs?
Fixed costs are the same whether you sell one unit or a thousand: rent, salaries, insurance, software subscriptions. Variable costs are incurred per unit sold: materials, packaging, payment processing, commission. The split is what makes the calculation work, because only variable costs scale with the volume you are solving for. Semi-variable costs (a phone plan with a per-call charge) should be split into their two parts.
What is the contribution margin ratio and why does it matter?
It is the share of each sale left after variable costs, and it converts a revenue target into a profit figure without counting units: at a 40% ratio, every extra $1,000 of sales adds $400 of profit once fixed costs are covered. It is the number to watch when comparing products, because a high-price item with a low ratio can contribute less per sale than a cheaper one with a high ratio.
What is the margin of safety?
How far expected sales sit above break-even, as units and as a percentage of expected sales. Selling 800 units against a 500-unit break-even gives a margin of safety of 300 units, or 37.5%: sales could fall by that much before the business loses money. A thin margin of safety is a warning even when the business is profitable.
Why can a price cut need so many more sales?
Because the cut comes straight off the contribution margin, not off the price. Cutting a $50 price by 10% to $45 leaves the $30 variable cost untouched, so the contribution per unit falls from $20 to $15 — a 25% drop — and break-even rises from 500 units to 667. The sensitivity table shows this asymmetry for your own figures before a discount is offered.
What does a break even analysis include beyond the break-even point?
A break even point calculator stops at the units or revenue where profit is zero. A full break even analysis adds three things around that point. A contribution margin calculator shows what each unit contributes to fixed costs after its own variable cost, which is the number the break-even point is built from. A margin of safety calculator shows how far expected sales sit above the break-even line, as units and as a percentage, so you can see how much a bad month would hurt. And a sensitivity check shows how the line moves when price or cost shifts by 10%. This break even analysis calculator reports all of them, because the break-even figure on its own says nothing about how safe the business is.