Break-even calculator
Find the sales volume and revenue needed to cover fixed costs—or reach a target operating profit.
Optional. Use 0 to calculate break-even only.
- Break-even revenue
- $16,666.67
- Contribution per unit
- $60
- Contribution margin ratio
- 60.0%
Assumes one product and a constant price. Tax, financing, capacity and changes in costs or demand are not included.
Included
- Contribution per unit and contribution margin ratio
- Exact break-even units and whole units rounded up
- Break-even sales revenue
- Units and revenue needed for an optional target operating profit
Not included
- Income tax, financing costs and cash-flow timing
- Changing prices, costs, product mix or capacity constraints
- Demand forecasts or a guarantee that the required sales can be achieved
What this means
Break-even is where total revenue equals total cost. First calculate contribution per unit—selling price minus variable cost. Then divide fixed costs by that contribution.
The exact result can contain part of a unit, but many products and services must be sold in whole units. The calculator therefore shows the exact mathematical point and the whole-unit target rounded up. Revenue uses the exact point so it stays consistent with the formula.
If variable cost is equal to or higher than selling price, each additional sale contributes nothing—or makes the shortfall worse. There is then no finite break-even point. Raise the price or lower the variable cost before treating sales volume as the solution.
Formula & worked example
contribution per unit = selling price − variable cost per unit break-even units = fixed costs ÷ contribution per unit break-even revenue = break-even units × selling price target units = (fixed costs + target operating profit) ÷ contribution per unit
$18,000 fixed costs, $100 selling price and $20 variable cost per unit
- Contribution per unit: $100 − $20
- $80
- Break-even units: $18,000 ÷ $80
- 225 units
- Break-even revenue: 225 × $100
- $22,500
At 225 units, contribution exactly covers the $18,000 fixed costs.
How this calculation works
The calculation follows the formulas, definitions and assumptions explained on this page. The references below support the method and any stated boundaries.
Official sources
- U.S. Small Business Administration — break-even point — Break-even units, sales revenue and contribution margin
- OpenStax — break-even point in units and dollars — Target-profit and contribution-margin-ratio methods
- Penn State Extension — price and pricing worksheet — Worked break-even and target-profit calculations
- Mississippi State University Extension — product pricing and break-even — Break-even equation, units and sales-value example