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How to use
This break-even calculator finds the units and sales revenue required for contribution margin to cover fixed costs. Enter fixed costs, selling price and variable cost per unit; the tool also shows contribution margin and can model a target profit or expected sales volume.
- Enter fixed costs for the same period in which you are measuring sales.
- Enter selling price and variable cost per unit in the same currency.
- Optionally add a target profit or expected unit volume, then calculate.
How it is calculated
Example
Example: fixed costs of 5,000, price 50 and variable cost 20 give 30 contribution per unit. Exact break-even is 166.67 units, so a business selling whole units needs 167 units, producing 8,350 of revenue at that whole-unit threshold.
Important notes
This is a planning model, not a sales forecast. It assumes price, variable cost and fixed cost stay constant over the range being studied. Discounts, product mix, step-cost capacity, taxes and returns can move the result. If price does not exceed variable cost, this model has no finite break-even volume.
Worked examples and interpreting results
Fixed costs 1000, price 30 and variable cost 20 per unit give contribution 10. Selling 100 units covers fixed cost;150 units gives target profit 500.
| Case | Calculation | Result |
|---|---|---|
| Break-even units | 1000 ÷ (30 − 20) | 100 |
| Units for target profit | (1000 + 500) ÷ 10 | 150 |
How to check the result
Assume constant price and variable cost per unit. If price does not exceed variable cost, there is no finite break-even point in this model. Whole units round upward.
Frequently asked questions
How do I calculate break-even units?
Break-even units = fixed costs ÷ (selling price − variable cost per unit), provided the contribution per unit is positive.
What is contribution margin?
It is selling price minus variable cost per unit, the amount available to cover fixed costs and then profit.
Why show exact and whole-unit break-even?
The mathematical result can be fractional, while many products are sold only as whole units, so the calculator also shows the minimum whole-unit threshold.
Does it work for multiple products?
The simple formula assumes one product or a fixed sales mix. A changing mix needs a weighted contribution approach.