What is the break-even point?

The break-even point is the number of units you must sell so that total revenue exactly equals total costs — both fixed and variable. Below the break-even point you operate at a loss; above it you generate a profit. It is calculated as: Break-Even Units = Fixed Costs / (Selling Price - Variable Cost Per Unit).

What is contribution margin?

Contribution margin is the amount each unit sold contributes toward covering fixed costs and generating profit, after accounting for variable costs. It is calculated as: Contribution Margin Per Unit = Selling Price - Variable Cost Per Unit. The contribution margin percentage expresses this as a share of the selling price.

What counts as a fixed cost vs. a variable cost?

Fixed costs stay the same regardless of how many units you produce or sell — examples include rent, salaried payroll, insurance, and equipment depreciation. Variable costs change in direct proportion to the number of units produced — examples include raw materials, packaging, per-unit labor, and shipping.

Why does the selling price need to exceed the variable cost?

If the selling price is equal to or lower than the variable cost, each unit sold increases your loss rather than contributing toward fixed costs. In that case there is no break-even point — the business loses money no matter how many units it sells. The calculator flags this condition and asks you to adjust your price or costs.

Break-Even Calculator

Name: Break-Even Calculator
Availability: InStock
Author: Nham Vu

Enter your fixed costs, variable cost per unit, and selling price per unit to instantly find the break-even point, contribution margin, and projected profit or loss.

Cost & Price Inputs

Currency

Fixed Costs rent, salaries, insurance…

Variable Cost per Unit materials, labor…

Selling Price per Unit

Optional Forecast

Expected Monthly Units for profit/loss estimate

Enter your costs and price on the left, then click Calculate.

Done!

Summary

Enter your fixed costs, variable cost per unit, and selling price per unit to instantly find the break-even point, contribution margin, and projected profit or loss.

How it works

Enter your total fixed costs (rent, salaries, equipment, etc.).
Enter the variable cost per unit (materials, labor, packaging, etc.).
Enter the selling price per unit.
Optionally enter your expected monthly sales volume for a profit forecast.
Select your preferred currency symbol.
Click Calculate to see your break-even point, contribution margin, and profit chart.

Use cases

A startup founder calculating how many units must be sold each month before the business becomes profitable.
A manufacturer analyzing whether a new product line can cover its fixed overhead given the planned price point and production cost.
A student or MBA candidate working through a break-even analysis assignment with live feedback.

Frequently Asked Questions

Last updated: 2026-06-09 · Reviewed by Nham Vu