Break-even calculator
Break-even calculator: enter fixed costs, variable cost per unit and unit price to get the contribution margin, the break-even volume and revenue, plus the margin of safety and profit at an expected volume and the volume needed for a target profit.
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Costs and price
Amounts are computed in integer cents and the break-even volume is rounded up to a whole unit. The model is linear cost-volume-profit analysis.
Result
20.0040.00%500 units25,000.00800 units300 units37.50%6,000.00700 unitsWhat this tool does
- Work out how many units a new product or store must sell each month just to stop losing money.
- Price negotiations: raise the unit price from 50 to 60 and see how far the break-even volume drops.
- Pair an expected volume with a margin of safety to gauge how much risk the plan carries.
- Reverse the maths from a profit target — say 400,000 a year — to the volume that delivers it.
Example
Input
Fixed costs 10000, variable cost 30 per unit, unit price 50, expected volume 800 units
Output
Contribution margin 20.00, contribution margin ratio 40.00%, break-even volume 500 units, break-even revenue 2,500.00, margin of safety 300 units, profit at expected volume 6,000.00
Fixed costs 10000 ÷ contribution margin 20 = 500 units, exactly the volume where profit is zero.
Frequently asked questions
Why is the break-even volume rounded up?
Because half a unit does not exist. With 10000 of fixed costs and a 20 contribution margin the exact figure is 500 units; if the maths gives 500.05, selling 500 still leaves you 1 short, so 501 is the first volume that truly breaks even. The tool always rounds up.
Is the contribution margin the same as gross margin?
No. The contribution margin is price minus variable cost per unit — it only strips out costs that move with volume, and it is what covers fixed costs. Gross margin also absorbs allocated fixed items such as labour and depreciation. Use contribution margin for break-even, gross margin to judge a product’s profitability.
What does the margin of safety tell me?
Margin of safety = expected volume − break-even volume: how far sales can fall before you lose money. As a ratio, 800 expected against 500 break-even gives 300 units and 37.5%, meaning volumes can drop by more than a third before the business goes into the red.
What happens if the price is below the variable cost?
Then every unit sold loses money and the break-even point does not exist — selling more only deepens the loss. The tool reports an error instead of returning a meaningless negative volume.
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