Break-Even Point Calculator
Find the sales you need to cover your costs
Break-Even Point Calculator: How Many Units Do You Need to Sell?
Our free break-even point calculator tells you how many units and how much revenue you need before a product or business stops losing money. Enter your fixed costs, the selling price and the variable cost per unit. You get the break-even units and revenue, the contribution margin, your margin of safety and the sales needed for a profit target. A chart shows revenue and cost lines crossing at the break-even point, and two more tabs find the price you need and the time to recover a startup investment.
Quick answer: with $12,000 of fixed costs, a $30 selling price and $12 of variable cost per unit, each sale contributes $18. You break even at 667 units, which is $20,010 in sales. If you expect to sell 1,000 units, your profit is $6,000 and your margin of safety is 33.3%.
What Is the Break-Even Point?
The break-even point is where total revenue equals total costs. Below it you lose money, and above it you make a profit. Businesses use it before launching a product, setting a price, signing a lease or hiring, because it turns a vague question about whether something will work into a number you can check against realistic sales.
Fixed Costs, Variable Costs and Contribution Margin
Fixed costs stay the same however much you sell, such as rent, salaries, insurance and software. Variable costs rise with each unit, such as materials, packaging, shipping and payment fees. The contribution margin is the price minus the variable cost, and it is the amount each sale has left to pay off fixed costs.
The table shows how the price changes the break-even point when fixed costs are $12,000 and variable cost is $12 per unit.
| Price per unit | Break-even units | Break-even revenue | Profit at 1,000 units |
|---|---|---|---|
| $20 | 1,500 | $30,000 | $-4,000 |
| $25 | 924 | $23,100 | $1,000 |
| $30 | 667 | $20,010 | $6,000 |
| $40 | 429 | $17,160 | $16,000 |
| $50 | 316 | $15,800 | $26,000 |
How to Lower Your Break-Even Point
You can lower the break-even point in three ways: raise your price, reduce variable costs, or reduce fixed costs. Each one cuts the number of units you must sell. Small changes add up, as the table shows for the same example business.
| Change | Break-even units |
|---|---|
| Raise the price from $30 to $33 | 572 |
| Cut variable cost from $12 to $10 | 600 |
| Cut fixed costs from $12,000 to $10,000 | 556 |
| Starting point ($12,000, $30, $12) | 667 |
Setting a Price That Covers Your Costs
If you already know how many units you expect to sell, you can work backward to the lowest price that breaks even. The Price Needed tab adds your fixed cost per unit to your variable cost, and adds your profit target as well if you enter one. With $12,000 of fixed costs and 1,000 units, that is $12 of fixed cost per unit, so a unit with $12 of variable cost needs a price of at least $24.00. To work from a margin or markup instead, try the profit margin calculator or the markup calculator.
Payback Time on a Startup Investment
A one-time investment such as equipment or a launch budget has to be earned back from monthly profit. The Payback Time tab takes your investment, monthly fixed costs, price, variable cost and monthly sales, and shows how many months it takes to recover the investment. In the default example, $20,000 is recovered in about 4.8 months. If you need to borrow to start, the loan calculator can estimate the repayments.
Who Uses a Break-Even Calculator?
New business owners, online sellers, restaurants and cafes, freelancers pricing a product, managers reviewing a new project, accountants and students of business and economics. Results are estimates that assume a steady price and variable cost, and they are not financial advice.
How to Use This Break-Even Point Calculator
Enter your fixed costs
Add the costs that stay the same however much you sell, such as rent and salaries.
Enter the selling price per unit
Use the price a customer pays for one unit.
Enter the variable cost per unit
Add the cost of materials, packaging and fees for one unit.
Add expected sales and a profit target (optional)
These give your margin of safety and the sales needed for a target profit.
Click "Calculate Break-Even"
See the units, revenue, margin and a chart. Use the other tabs for the price needed or payback time.