How many units must you sell to cover your costs? Enter fixed costs, price, and variable cost per unit to see your break-even point, break-even revenue, and contribution margin instantly.
The break-even point is the sales volume at which total revenue exactly equals total cost — the moment you stop losing money and the next sale becomes profit. It is the first number any new product, pricing change, or business plan should be tested against, because it converts a vague hope ("this should work") into a concrete target ("we need to sell 334 units a month").
The formula:
Break-even units = fixed costs ÷ (price per unit − variable cost per unit).
The denominator — price minus variable cost — is the contribution margin, the amount each sale contributes toward covering your fixed costs. With $20,000 of fixed costs, a $100 price, and $40 of variable cost, each unit contributes $60, so you break even at 20,000 ÷ 60 ≈ 334 units. Multiply by price for break-even revenue: 334 × $100 ≈ $33,400.
The whole calculation hinges on classifying costs correctly:
The classic error is dumping everything into one bucket. A salary is fixed; a 3% Stripe fee is variable. Misclassify them and your break-even point is wrong in both directions — counting variable costs as fixed inflates the hurdle, while counting fixed costs as variable hides how much volume you actually need.
Contribution margin per unit (and its percentage, contribution margin ÷ price) is the most actionable number on this page. The higher it is, the fewer units you need to break even and the faster profit accumulates after. There are three ways to improve it:
If variable cost per unit is equal to or greater than price, the contribution margin is zero or negative — and there is no break-even point at any volume. Every sale loses money, and selling more makes the loss bigger, not smaller. "We'll make it up on volume" is mathematically impossible here. The only fixes are to raise price or cut variable cost until the margin turns positive. The calculator flags this case so you catch it before launch, not after.
Break-even analysis is most powerful as a what-if tool. Before a price change, check how it moves the break-even volume. Before signing an office lease (fixed cost), see how many extra units it forces you to sell. Before a discount promotion, confirm the higher volume actually clears the now-lower margin. Pair it with your marketing economics: hitting break-even volume only matters if you can acquire those customers profitably, so check your CAC against your contribution margin too.
Break-even is a snapshot model. It assumes price and variable cost per unit stay constant across all volumes — in reality, bulk discounts lower variable cost at scale, and demand may fall as you push volume. It also treats all fixed costs as truly fixed, when many are "step costs" that jump when you add a shift or a location. Use it for direction and targets, then revisit the assumptions as volume grows.
Break-even units = fixed costs ÷ (price − variable cost per unit). Multiply by price for break-even revenue.
Price per unit minus variable cost per unit — what each sale contributes to fixed costs. As a percent: contribution margin ÷ price.
Then there's no break-even point — every unit loses money. Raise price or cut variable cost until the margin is positive.
Fixed costs don't change with volume (rent, salaries); variable costs rise per unit (materials, shipping, fees). Only variable costs go in the margin.