Break-Even Calculator
Break-even units, revenue, and per unit margin from fixed costs, price, and variable cost.
What it does
Break-even marks where total revenue finally covers total cost: every unit sold before it pays down fixed costs, every unit after it earns. The per unit margin decides the pace, fixed costs decide the distance.
The tool above takes fixed costs with unit price and unit variable cost. It returns whole break-even units with break-even revenue and the per unit margin beside them.
The default of $10,000 fixed, $25 price, and $15 variable cost leaves $10.00 margin per unit, so 1,000 units and $25,000.00 of revenue break even. A leaner $5,000 fixed at $20 price and $12 cost needs only 625 units.
The formula follows the Small Business Administration break-even guide with university enterprise budget teaching matching each term. Both define the point as fixed costs divided by price minus variable cost.
How to use
- Total fixed costs for the period, rent through insurance.
- Enter the selling price per unit.
- Enter the variable cost inside each unit.
- Read whole units first for the sales target.
- Read margin to see what each extra sale earns.
Formula
- fixed
- Period costs that ignore volume.
- margin
- Price minus variable cost, the line closer per unit.
- units
- Rounded up, since half units never sell.
Single product math throughout. Multi product shops weight margins by sales mix instead. In sales dollars the same point is fixed divided by margin ratio (margin over price).
Worked example
Example: $10,000 fixed, $25 price, $15 cost
Defaults: fixed 10000, price 25, variable cost 15.
- Margin: 25 - 15 = $10.00 per unit.
- Units: 10,000 / 10 = 1,000 units exactly.
- Revenue: 1,000 x 25 = $25,000.00.
- Check: 1,000 x 15 + 10,000 = $25,000.00 cost, equal.
- Tool shows 1,000 units, $25,000.00, $10.00 per unit.
Reference table
| Fixed / price / cost | Units | Revenue |
|---|---|---|
| $10,000 / $25 / $15 | 1,000 units | $25,000.00 |
| $5,000 / $20 / $12 | 625 units | $12,500.00 |
| $9,000 / $50 / $20 | 300 units | $15,000.00 |
Limits
- One product, one price: mixes need weighted margins.
- Costs assumed linear; bulk discounts bend the lines.
- Cash timing ignored: profit and cash arrive on different days.
- Taxes excluded from the revenue line.
Common mistakes
- Pricing below variable cost, where volume deepens the hole.
- Hiding semi-variable costs fully in fixed or variable.
- Quoting fractional units instead of rounding up.
- Forgetting owner labor inside fixed costs.
- Treating break-even as the goal instead of the floor.
Try it yourself
Quick checks. Answers sit tucked under each question.
Fixed $5,000, price $20, cost $12?
Margin $8.00: 625 units, $12,500.00 revenue.
Price $10 with $12 variable cost?
Rejected: price must beat variable cost per unit.
Break-even in sales dollars for the example?
10,000 / (10/25) = $25,000.00, matching the units math.
Questions
What is the break-even formula?
Fixed costs divided by price minus variable cost, in units.
What is contribution margin?
Price minus variable cost per unit: the fixed cost reducer each sale brings.
Why round units up?
Fractional units never sell. 333.2 units means 334 real sales.
What if price barely beats cost?
The unit count explodes. Thin margins need big volumes to clear fixed costs.
Units or dollars?
Same point both ways. Dollars equal fixed divided by margin ratio.
Does it include profit?
No, it marks zero profit. Add target profit to fixed costs to price a goal instead.