Break-even calculator
Enter your fixed costs, the selling price and the variable cost per unit and this break even calculator shows how many units and how much revenue you need to break even, together with the contribution margin and contribution margin ratio. Add a target profit to see the sales it takes to earn it.
Example: Fixed costs for the period 5,000 · Selling price per unit 25 · Variable cost per unit 10 → Break-even point (units): 334. Source: U.S. Small Business Administration – Break-even point (Calculate your startup costs). Updated: .
How it is calculated
Break-even point formula
The break-even point is where total revenue equals total cost – no profit, no loss. The U.S. Small Business Administration gives the formula:
How to calculate the break-even point
- Enter fixed costs for the period, such as a month’s rent and salaries.
- Enter the selling price and variable cost per unit.
- Read break-even units, break-even sales, contribution margin and ratio; optionally add a target profit.
Break-even point (units) = fixed costs ÷ (sales price per unit − variable cost per unit)
The denominator is the contribution margin per unit: the amount each sale contributes toward covering fixed costs.
Example
The OpenStax accounting textbook uses a birdbath maker with 18,000 fixed costs, a 100 price and 20 variable cost per unit:
| Figure | Calculation | Result |
|---|---|---|
| Contribution margin per unit | 100 − 20 | 80 |
| Contribution margin ratio | 80 ÷ 100 | 80% |
| Break-even units | 18,000 ÷ 80 | 225 units |
| Break-even sales | 18,000 ÷ 0.80 | 22,500 |
When the result is not a whole number, the calculator rounds up: with 5,000 fixed costs, a 25 price and 10 variable cost you need 5,000 ÷ 15 = 333.33, so 334 units.
Break-even in sales revenue
Break-even sales = fixed costs ÷ contribution margin ratio, where the ratio is contribution margin ÷ price. This is handy when you sell many products at different prices: with an average ratio you get the revenue you need without counting units, as long as your sales mix stays the same.
Adding a target profit
Treat the profit you want like an extra fixed cost: units = (fixed costs + target profit) ÷ contribution margin per unit. In the OpenStax example a 16,000 profit takes (18,000 + 16,000) ÷ 80 = 425 units, or 42,500 in sales.
Keep in mind
Use prices before sales tax, and keep all figures on the same period – monthly fixed costs give a monthly break-even. The model assumes costs rise in a straight line; volume discounts or a step up in fixed costs (a second location, a new hire) move the break-even point.
More calculators: see margin per product with the margin calculator, set prices with the selling price calculator, and estimate customer value with the customer lifetime value calculator.
Frequently asked questions
How do you calculate the break-even point?
Divide fixed costs by the contribution margin per unit (price − variable cost). 18,000 ÷ (100 − 20) = 225 units.
How do I calculate break-even sales revenue?
Divide fixed costs by the contribution margin ratio: 18,000 ÷ 80% = 22,500. The ratio is the contribution margin divided by the price.
What is the contribution margin?
The selling price minus the variable cost per unit. It is what each sale contributes toward fixed costs and, once they are covered, toward profit.
How many units do I need to sell to make a target profit?
Add the target profit to fixed costs and divide by the contribution margin per unit: (18,000 + 16,000) ÷ 80 = 425 units.
What is the break-even formula in Excel?
Fixed costs in A2, price in B2, variable cost in C2: units =ROUNDUP(A2/(B2-C2),0), sales =A2/((B2-C2)/B2).
How do I calculate break-even ROAS?
Break-even ROAS = 1 ÷ contribution margin ratio. Example: price 25, variable cost 10 → margin 60% → ROAS 1.67. Every unit of ad spend must bring in 1.67 in revenue just to break even. Ad costs must not already be included in the variable costs.
Sources and legal basis
- U.S. Small Business Administration – Break-even point (Calculate your startup costs)
- OpenStax Principles of Accounting, Vol. 2, 3.2 Calculate a Break-Even Point in Units and Dollars (Rice University)
- OpenStax Principles of Accounting, Vol. 2, 3.1 Contribution Margin (Rice University)
As of: · Editorial policy
Related tools
- Margin calculatorMargin calculator: enter cost or price plus margin, markup or profit and get the rest – with totals by quantity and a margin table for volume price tiers.
- Selling price calculatorWork out the selling price of a product from cost, shipping, packaging, percentage selling fees and your target margin – fees are solved correctly.
- ROAS calculatorCalculate ROAS as a ratio and a percentage, plus ACOS, CPA and your break-even ROAS from your margin – using the Google Ads and Amazon Ads definitions.
- Customer lifetime value calculatorCalculate customer lifetime value (CLV/LTV) from order value, purchase frequency, lifespan or churn and margin – with CAC, LTV:CAC ratio and payback period.
- Freight Class Calculator (density-based)Freight class calculator: enter the dimensions and weight of a pallet or crate to get its density in lb/ft³ and the LTL freight class on the 13-step NMFC scale.
- Price per sheet calculatorCompare toilet paper by price per sheet and per 100 sheets, ply-adjusted. Also for paper towels, laundry detergent per load, diapers and pods. Free.
- CBM calculatorCBM calculator for shipping: enter length, width and height in cm, mm, m, inches or feet plus the number of cartons and get cubic meters and cubic feet.
- A/B test calculatorA/B test calculator: compare conversion rates of two variants and get the uplift, p-value, confidence interval and the sample size your test really needs.
- Selling Fee Calculator for Etsy, eBay, Amazon and ShopifyCalculate Etsy, eBay, Amazon and Shopify seller fees: commission, payment processing, payout, profit and margin per sale – with sources, as of 09/2026.