Break-Even Calculator — units and revenue to break even

How it works

The engine is the contribution margin: price minus variable cost, the part of each sale left over to cover fixed costs after the unit pays for itself. Divide fixed costs by that margin and you get the units needed to cover them exactly; multiply those units by the price for the break-even revenue. Setting a target profit adds it to the fixed costs in the numerator, so the same formula answers "how many units for a $50,000 profit?" The price sweep shows the leverage price has: a wider margin means each unit does more work, and the break-even point falls — sometimes sharply — as price rises.

Worked example

The anchor is CFI's Premium Water Bottles example: $100,000 in fixed costs, a $12 selling price, and $2 of variable cost per bottle. The contribution margin is $12 − $2 = $10, so break-even is $100,000 ÷ $10 = 10,000 units, which at $12 each is $120,000 in sales. Add a $50,000 profit target and the numerator becomes $150,000, lifting the volume to 15,000 units — this calculator's own arithmetic on the same formula.

Frequently asked questions

How do I calculate the break-even point?

Divide fixed costs by the contribution margin per unit (selling price minus variable cost). Fixed costs of $100,000 and a $10 margin break even at 10,000 units. Multiply by the price for the break-even in dollars. It assumes one product and a constant price and cost.

What is the contribution margin?

The selling price minus the variable cost of one unit — the amount each sale contributes toward fixed costs and, once those are covered, toward profit. It's the lever the whole calculation turns on: the wider the margin, the fewer units you need to break even.

How do I find the volume for a target profit?

Add the profit target to fixed costs, then divide by the contribution margin. For a $50,000 profit on top of $100,000 fixed costs at a $10 margin, that's $150,000 ÷ $10 = 15,000 units. The optional target-profit input does this for you; leave it at zero for pure break-even.

Why does a higher price lower the break-even point?

Because it widens the contribution margin, so each unit covers more of the fixed costs. Raising the price from $12 to $20 (variable cost $2) lifts the margin from $10 to $18 and cuts break-even from 10,000 to about 5,556 units — though a higher price may also sell fewer units, which the calculation doesn't predict.

What does the break-even point leave out?

It assumes a single product, a constant selling price, and variable costs that scale linearly — no volume discounts, no price changes, no step increases in fixed costs. Real businesses face all of these, so treat break-even as a planning benchmark, not a guarantee, and re-run it as your cost structure shifts.

Is break-even in units or in dollars more useful?

Both answer the same question in different terms. Units are concrete for a single product ("we must sell 10,000 bottles"); revenue is easier when you sell a mix of items ("we must book $120,000 in sales"). This page reports both from the same inputs.

How accurate is this, and what does it exclude?

The arithmetic is exact for the fixed costs, price, and variable cost entered, including a target profit. It excludes taxes, multiple products with different margins, changing prices or costs across volume, and any demand response to price. If price is at or below variable cost there is no break-even — every sale loses money.