Break-even calculator
Find how many units you need to sell to cover your costs, and how much room your sales plan leaves.
Optional
Break-even units
2.500
Units to sell
Break-even revenue
125.000
Sales to reach
Contribution margin
40,0 %
20,00 per unit
Margin of safety
37,5 %
Room on planned sales
At 4.000 units you make a profit of 30.000. You need 3.500 units to reach your target profit.
Revenue and costs by units sold
- Revenue
- Total costs
- Fixed costs
Profit by sales level
| Of break-even | Units | Revenue | Total costs | Profit |
|---|---|---|---|---|
| 50 % | 1.250 | 62.500 | 87.500 | −25.000 |
| 75 % | 1.875 | 93.750 | 106.250 | −12.500 |
| 100 % | 2.500 | 125.000 | 125.000 | 0 |
| 125 % | 3.125 | 156.250 | 143.750 | 12.500 |
| 150 % | 3.750 | 187.500 | 162.500 | 25.000 |
Assumes a constant price and constant costs per unit at every sales level. Break-even units are rounded up to a whole unit.
What is the break-even point?
It is the level of sales at which revenue exactly covers all costs, so there is neither a profit nor a loss. Every unit sold above it adds to profit. Knowing it tells you how much you need to sell before a product, shop or business starts to make money.
Break-even formula
Break-even units = Fixed costs / (Price − Variable cost per unit)
Break-even revenue = Fixed costs / Contribution margin ratio
Price less variable cost is the contribution margin: what each sale leaves to pay for fixed costs. The ratio is that margin divided by the price.
How to calculate break-even: an example
A business has fixed costs of 50.000. It sells at 50 a unit, and each unit costs 30 to make. The contribution margin is 20, or 40 % of the price. It breaks even at 50.000 / 20 = 2.500 units, which is 125.000 of revenue.
Fixed and variable costs
Fixed costs stay the same whatever you sell, such as rent, salaries and insurance. Variable costs rise with each sale, such as materials, packaging and sales commissions. Costs that sit in between are best split, with the part that moves with sales treated as variable.
What is the margin of safety?
Margin of safety = (Planned sales − Break-even sales) / Planned sales
It shows how far sales can fall before you start losing money. A margin of 37,5 % means sales could drop by more than a third and the business would still cover its costs.
How to lower your break-even point
You can raise prices, cut the variable cost of each unit or reduce fixed costs. Even small changes matter: since the break-even depends on the contribution margin, a higher margin means fewer sales are needed to cover the same costs.