Break-Even Calculator

The number of units (or revenue dollars) you need to sell so that total revenue exactly equals total cost. Below break-even you lose money; above break-even every additional unit adds its contribution margin to profit.

Break-even units = fixed costs ÷ (selling price − variable cost per unit). The denominator is the contribution margin per unit. Break-even revenue is just break-even units × selling price.

Selling price minus variable cost per unit. It is the dollar amount each unit "contributes" toward covering fixed costs and, after break-even, toward profit. Contribution margin ratio is contribution margin ÷ selling price.

Fixed costs do not change with volume in the short run: rent, salaries, software subscriptions, insurance. Variable costs scale directly with units sold: materials, packaging, payment processing fees, shipping. Some costs are mixed (utilities); split them carefully.

Lock in your fixed cost coverage need, then test prices. A higher price raises contribution margin per unit and lowers break-even units, but may reduce volume. Pair this calculator with a margin or markup calculator to make sure your price also delivers your target gross margin.

Your variable cost per unit is at or above your selling price, so contribution margin is zero or negative. Each sale either nets you nothing or actively loses money, so no volume of sales will cover fixed costs. Either raise price or cut variable cost.