What is break-even point?
Break-even point is the sales level where total revenue covers total costs, with no profit or loss.
Business Calculator
Break-even Calculator
Calculate how many units or how much sales revenue a business needs to cover its fixed and variable costs.
Result
Break-even point
Enter fixed costs to calculate break-even point.
Break-even Units = Fixed Costs / Contribution Margin per Unit
Explanation
What break-even point means
Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit
Break-even Units = Fixed Costs / Contribution Margin per Unit
Break-even Sales = Break-even Units x Selling Price per Unit
Break-even point is where sales cover costs, but the business has not made a profit yet.
Fixed costs stay the same over the activity range, while variable costs change with each unit sold. Contribution margin is the amount each unit contributes toward fixed costs and then profit.
Worked example
Example calculation
Fixed costs10,000
Selling price per unit50
Variable cost per unit30
Contribution margin20
Break-even units500
Break-even sales25,000
The contribution margin is 20 per unit. Dividing 10,000 of fixed costs by 20 gives 500 break-even units, or 25,000 of break-even sales.
Common mistakes
Mistakes to avoid
Mixing up fixed costs and variable costs
Forgetting that selling price must be higher than variable cost
Using total variable costs instead of variable cost per unit
Assuming break-even means profit
Ignoring changes in costs or selling price
Related tools
Connect break-even checks with accounting basics
Review related numbers with ratio, equation, and trial balance tools.
FAQ
Break-even Calculator FAQs
How do you calculate break-even units?
Divide fixed costs by contribution margin per unit. Contribution margin is selling price per unit minus variable cost per unit.
How do you calculate break-even sales?
Multiply break-even units by the selling price per unit to estimate break-even sales revenue.
What is contribution margin?
Contribution margin is the amount each unit contributes toward covering fixed costs and then profit.
Does breaking even mean making a profit?
No. Breaking even means revenue covers costs. Profit starts after sales move above the break-even point.
Can this calculator help with business homework?
Yes. It can help check simple break-even calculations, but you should still show your formula and working.