Business
Break-Even Calculator
Find out exactly how many units you need to sell to cover all your costs. Know your break-even revenue, contribution margin, and margin of safety.
Enter your costs and pricing, then click Calculate
Break-Even Point
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How is this calculated?
Formula: Fixed costs divided by contribution margin.
Contribution Margin = Selling Price − Variable Cost
Contribution Margin Ratio = Contribution Margin / Selling Price
Break-Even Units = ⌈Fixed Costs / Contribution Margin⌉
Break-Even Revenue = Break-Even Units × Selling Price
Margin of Safety = (Expected − Break-Even) / Expected × 100%Calculation history
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FAQ
Frequently asked questions
What is break-even analysis?
Break-even analysis determines the point at which total revenue equals total costs — meaning no profit or loss. It tells you the minimum number of units you must sell (or revenue you must generate) to cover all fixed and variable costs. Beyond break-even, every unit sold generates profit.
What is contribution margin?
Contribution margin is the selling price per unit minus the variable cost per unit. It represents how much each unit "contributes" toward covering fixed costs and generating profit. A higher contribution margin means fewer units needed to break even. The contribution margin ratio is this value divided by selling price.
How can I lower my break-even point?
Three ways: (1) Reduce fixed costs — negotiate lower rent, switch to cheaper tools, reduce headcount. (2) Reduce variable costs — find cheaper suppliers, improve production efficiency. (3) Increase selling price — add value to justify higher prices. Each approach reduces the number of units needed to break even.
What are fixed vs variable costs?
Fixed costs remain the same regardless of production volume: rent, salaries, insurance, loan payments, software subscriptions. Variable costs change with each unit produced: raw materials, shipping per unit, sales commissions, packaging. Some costs are "semi-variable" (utilities) — estimate the fixed portion.
What is margin of safety?
Margin of safety measures how far above break-even your actual (or expected) sales are, expressed as a percentage. Formula: (Expected Units − Break-even Units) / Expected Units × 100. A 25% margin of safety means sales could drop 25% before you start losing money. Higher is safer.