Break-Even Calculator
The break-even point is where total revenue equals total costs — you make neither a profit nor a loss. It is calculated as: Fixed Costs ÷ (Selling Price − Variable Cost per Unit).
Break-even point
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Target profit planner
How many units do you need to sell to hit a profit target?
Related: Profit Margin · Markup Calculator
How the Break-Even Calculator works
This calculator determines the number of units you need to sell to cover all costs and reach break-even. Enter your total fixed costs, the variable cost per unit, and your selling price per unit. The calculator divides your fixed costs by the contribution margin (selling price minus variable cost) to find the break-even point in units, and multiplies by the selling price to show the required revenue.
The contribution margin percentage is also shown — this tells you what proportion of each pound of revenue contributes to covering fixed costs and profit. A higher contribution margin means fewer sales are needed to break even and profit accumulates more quickly beyond that point.
Use the target profit planner to find out how many units you need to sell to achieve a specific profit figure. This is useful for setting sales targets and evaluating whether a business model is viable at realistic volume levels.
Frequently asked questions
What is break-even analysis?
Break-even analysis is a financial planning technique that identifies the point at which a business or project covers all its costs and begins to generate profit. It helps entrepreneurs and managers understand the minimum level of sales required to avoid a loss, and is essential for pricing decisions, business planning, and investment appraisals.
How do I calculate the break-even point?
The break-even point in units is calculated as: Fixed Costs divided by (Selling Price per Unit minus Variable Cost per Unit). The difference between selling price and variable cost is called the contribution margin. In revenue terms, break-even revenue equals break-even units multiplied by the selling price per unit.
What is the difference between fixed and variable costs?
Fixed costs do not change with the level of output — examples include rent, salaries, insurance, and loan repayments. Variable costs change in direct proportion to production or sales volume — examples include raw materials, packaging, and sales commissions. Understanding this distinction is fundamental to break-even analysis and cost management.
How can I lower my break-even point?
You can lower your break-even point by reducing fixed costs (e.g. renegotiating rent or cutting overheads), reducing variable costs per unit (e.g. through better supplier terms or efficiency improvements), or increasing your selling price to widen the contribution margin. Each of these strategies reduces the number of units you need to sell before making a profit.