Break Even Point
Calculator
Results
- Break-even units
- 1,000
- Break-even revenue
- 80,000
- Contribution margin per unit
- 50
- Contribution margin (%)
- 62.5
Results
| Break-even units | 1,000 |
| Break-even revenue | 80,000 |
| Contribution margin per unit | 50 |
| Contribution margin (%) | 62.5 |
formula-map diagram
- Break-even units
- 1,000
- Break-even revenue
- 80,000
- Contribution margin per unit
- 50
- Contribution margin (%)
- 62.5
Formula breakdown
Formula
Break-even units = Fixed costs ÷ (Price − Variable cost)= 1000
Note
This is a simplified model. Results use standard textbook definitions and ignore taxes, seasonality, attribution lag, discounting and accounting policy differences. Use them as an estimate, not as accounting, tax or investment advice.
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See all →Frequently asked questions
What does the break-even point represent?+
The break-even point is the sales volume (in units or revenue) at which total revenue exactly equals total costs, meaning the business is neither making a profit nor a loss. Selling beyond that point generates profit; selling below it means a loss.
How is break-even point in units calculated?+
Break-even units = fixed costs / (price per unit - variable cost per unit). The denominator is the contribution margin per unit — what's left from each sale after covering variable costs — which goes toward paying off fixed costs.
What's the difference between fixed costs and variable costs in this calculation?+
Fixed costs (like rent, salaries, and insurance) stay the same regardless of how much you sell, while variable costs (like materials and shipping) scale directly with each unit produced or sold. Misclassifying a cost as fixed when it's actually variable (or vice versa) will distort the break-even result.
Why does a lower contribution margin push the break-even point higher?+
A smaller contribution margin per unit means each sale pays off less of the fixed costs, so more units need to be sold to cover the same fixed cost base. This is why thin-margin businesses need much higher sales volume to become profitable than high-margin ones.
Does break-even analysis account for taxes or one-time costs?+
No — the standard break-even formula only considers ongoing fixed and variable operating costs, not taxes, interest, or one-time capital expenditures. It's a simplified operational planning tool, not a full profitability or cash-flow forecast.