Break-Even Calculator

Break-even analysis determines the sales volume at which total revenue equals total costs — the point where you neither profit nor lose money. It is a fundamental tool for pricing decisions, business planning, and evaluating new products or services. The break-even point in units is: fixed costs ÷ (selling price − variable cost per unit).

Consider a business with $10,000 in fixed costs (rent, salaries, insurance), $5 variable cost per unit (materials, shipping), and a $15 selling price. The contribution margin per unit is $15 − $5 = $10. Break-even units = $10,000 ÷ $10 = 1,000 units. At 1,000 units, revenue of $15,000 exactly covers $10,000 fixed plus $5,000 variable costs. Every unit sold beyond 1,000 generates $10 in profit.

Fixed costs remain constant regardless of production volume — rent, insurance, salaried employees. Variable costs change with each unit produced — raw materials, commissions, packaging. Semi-variable costs like utilities may have both components; allocate the fixed portion to fixed costs and the per-unit portion to variable costs for accurate analysis.

Break-even analysis helps answer critical business questions. Should you launch a new product line? Lower the price to increase volume? Move to a cheaper location with higher rent but lower variable costs? By modeling different scenarios — adjusting price, costs, or volume — you can see exactly how each decision shifts the break-even point and required sales target.

Enter your fixed costs, variable cost per unit, and selling price to find the break-even volume in units and the corresponding revenue. Use this as a baseline for sales targets, pricing strategy, and feasibility analysis for new ventures or product launches.