Small business calculator
Break-even Calculator
See how many units you need to sell to cover fixed costs for a line. Enter fixed costs for the period, variable cost per unit, and selling price per unit. You get break-even units, break-even revenue, contribution margin per unit, and contribution margin ratio (percent of price).
Inputs
Use one currency throughout. Fixed costs are what you pay even if you sell nothing (rent, salaries, insurance slice for this line). Variable cost is what changes with each unit sold (materials, direct labor, shipping per item).
Results
Contribution margin per unit is selling price minus variable cost. Break-even units divide fixed costs by that margin when it is positive. Break-even revenue multiplies break-even units by selling price. Contribution margin ratio is that margin as a percent of selling price.
Example
Fixed costs are $12,000, variable cost is $16 per unit, and you sell at $40 per unit. Contribution margin per unit is $40 − $16 = $24. Break-even units are $12,000 ÷ $24 = 500 units. Break-even revenue is 500 × $40 = $20,000. Contribution margin ratio is $24 ÷ $40 × 100 = 60%.
How it works
Contribution margin per unit = selling price per unit − variable cost per unit. Break-even units = fixed costs ÷ contribution margin per unit (only when that margin is greater than zero, so you are not dividing by zero). Break-even revenue = break-even units × selling price per unit. Contribution margin ratio = contribution margin per unit ÷ selling price per unit × 100. If selling price is zero, the ratio is not shown.
Related tools
Profit Calculator for a sold quantity and line discount, or back to the Small Business calculator list.