Break-Even Calculator
Calculate how many units you need to sell to cover your business costs and reach break-even. Enter your fixed costs, selling price per unit, and variable cost per unit to instantly estimate your break-even point.
How to Use
Enter your total fixed costs.
Enter the selling price per unit.
Enter the variable cost per unit.
Select your preferred currency.
Click Calculate Break-Even Point.
View the number of units you need to sell to break even and the sales revenue required to cover your costs.
Break-Even Calculator
Enter your business costs and selling price below to calculate your break-even point.
Example Calculation
This example shows how the Break-Even Calculator works using sample figures. Enter your own business costs and selling price to calculate your break-even point.
Example
Suppose a business has £10,000 in fixed costs, sells its product for £50 per unit, and has a variable cost of £30 per unit.
Business Details
Fixed Costs: £10,000
Selling Price per Unit: £50
Variable Cost per Unit: £30
Estimated Results
Break-Even Units: 500 units
Break-Even Revenue: £25,000.00
Contribution Margin per Unit: £20.00
Contribution Margin Ratio: 40.00%
Explanation
The business earns a £20 contribution margin from each unit sold (£50 selling price − £30 variable cost).
To cover £10,000 in fixed costs, the business needs to sell 500 units.
At 500 units, total sales revenue is £25,000, which is the break-even point. At this point, the business has covered its fixed and variable costs but has not yet made a profit.
Once sales exceed 500 units, each additional unit sold contributes £20 toward profit, assuming costs and selling price remain unchanged.
What Do These Results Mean?
Break-Even Units
The number of units you need to sell to cover all fixed and variable costs without making a profit or a loss.
Break-Even Revenue
The total sales revenue required to reach the break-even point.
Contribution Margin per Unit
The amount from each sale that remains after subtracting the variable cost per unit. This amount contributes toward covering fixed costs and, after break-even, profit.
Contribution Margin Ratio
The percentage of each sale available to cover fixed costs and then contribute to profit.
Calculation Formula
How is the break-even point calculated?
Our Break-Even Calculator uses the standard break-even formula to determine how many units a business needs to sell to cover its fixed and variable costs.
Formula
Since Hostinger displays formulas as plain text, paste it exactly like this:
Break-Even Units = Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit)
What each term means
Fixed Costs
Business costs that generally do not change based on the number of units sold, such as rent, insurance, or certain salaries.
Selling Price per Unit
The amount charged to customers for each unit sold.
Variable Cost per Unit
The cost associated with producing or delivering each additional unit.
Contribution Margin per Unit
The amount remaining from each sale after subtracting the variable cost per unit.Break-Even Revenue Formula
Break-Even Revenue = Break-Even Units × Selling Price per Unit
Contribution Margin Formula
Contribution Margin per Unit = Selling Price per Unit − Variable Cost per Unit
Contribution Margin Ratio = (Contribution Margin per Unit ÷ Selling Price per Unit) × 100
Frequently Asked Questions
What is a break-even point?
The break-even point is the level of sales at which your total revenue covers your total costs. At break-even, the business is neither making a profit nor a loss.
What are fixed and variable costs?
Fixed costs are expenses that generally remain the same regardless of how many units you sell, such as rent or insurance. Variable costs change depending on the number of units produced or sold, such as materials, packaging, or certain delivery costs.
Why is the contribution margin important?
The contribution margin shows how much money from each sale remains after variable costs are deducted. This amount helps cover fixed costs, and once those costs are covered, it contributes toward profit.
Can I use this Break-Even Calculator for any business?
Yes. The calculator can be used by many businesses that can identify their fixed costs, selling price per unit, and variable cost per unit. It is particularly useful for product-based businesses and businesses with clearly defined units of sale.
The results provided by this Break-Even Calculator are for informational and educational purposes only. They are estimates based on the information you enter and should not be considered financial, accounting, tax, legal, or professional advice.
Actual business costs, revenue, profitability, and break-even results may vary due to changes in pricing, expenses, taxes, fees, sales volume, and other business factors.
Always consider your individual business circumstances and seek advice from a qualified professional where appropriate before making financial or business decisions.