Calculate how many units or how much revenue you need to cover fixed and variable costs. Includes target-profit planning and contribution margin analysis.
Overview
The Break-Even Calculator determines how many units or how much revenue a business needs to cover its fixed and variable costs. It also estimates the volume and revenue required to reach a target profit, helping small businesses, retailers, manufacturers, and service providers make informed pricing and sales-planning decisions.
Common Use Cases
Pricing and sales target planning
Product profitability analysis
New product launch evaluation
Fixed cost coverage planning
Profit target forecasting
Service pricing decisions
Business plan preparation
Contribution margin analysis
Marketing campaign ROI planning
Cost structure review
Inventory management decisions
Freelance and consulting pricing
How to Use
1
Enter the selling price per unit or service.
2
Input the variable cost per unit, such as materials and direct labor.
3
Enter total fixed costs for the period, such as rent, salaries, and utilities.
4
Optionally set a target profit amount.
5
Review the contribution margin per unit and as a percentage.
6
Check how many units must be sold to break even.
7
Review the revenue required to reach break-even and target profit.
Example Scenario
Small Product Launch
A business plans to sell a product at a set unit price with known variable costs and fixed overhead. The calculator shows the exact sales volume and revenue needed to cover costs and reach a target profit.
Technical Notes
Contribution margin is the selling price minus the variable cost per unit and represents the amount available to cover fixed costs.
Break-even units equal fixed costs divided by the contribution margin per unit.
Break-even revenue is the sales revenue that exactly covers all fixed and variable costs.
When a target profit is provided, the required units and revenue are increased to cover fixed costs plus the target profit.
If the selling price does not exceed variable costs, break-even cannot be reached at any volume.
Fixed costs and results are tied to the period you enter (monthly, quarterly, or yearly).
Common Mistakes
Confusing variable and fixed costs
Ignoring that break-even applies to a specific period
Forgetting to include all fixed overhead
Pricing below variable cost
Treating break-even volume as the profit target
Ignoring contribution margin when planning discounts
Frequently Asked Questions
Break-even units is the number of items you must sell, while break-even revenue is the total sales value of those items.
Every sale loses money, so no sales volume can reach break-even.
Include owner salary and other regular overhead in fixed costs so the result reflects true business survival.
Yes. Use the service price as the selling price, per-job costs as variable cost, and monthly overhead as fixed costs.