What is the break-even point?

The break-even point is the number of units you must sell so that total revenue equals total costs — meaning zero profit and zero loss. Every unit sold beyond that number generates pure profit (contribution margin).

What counts as a fixed cost?

Fixed costs are expenses that remain constant regardless of how many units you sell — for example: rent, salaries, insurance, annual software subscriptions, and loan repayments. They do not increase when you produce or sell more units.

What counts as a variable cost?

Variable costs change directly with production or sales volume — for example: raw materials, packaging, per-unit shipping fees, payment processing fees, and sales commissions. Each additional unit sold incurs one more unit of variable cost.

What is the contribution margin?

The contribution margin is the selling price minus the variable cost per unit. It represents how much each unit "contributes" toward covering fixed costs. Once total contributions equal fixed costs, you have reached break-even.

What if my selling price is lower than or equal to variable cost?

If the selling price is not greater than the variable cost per unit, the contribution margin is zero or negative — meaning you lose money on every unit sold and can never break even. The calculator will display an error in this case.

Can I use this for a service business?

Yes. Treat each service delivery (session, project, subscription seat) as a "unit." Set the variable cost to per-delivery costs (contractor pay, software per seat) and fixed costs to overhead. The math is identical.

Break-Even Units Calculator

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

Enter your fixed costs, variable cost per unit, and selling price to instantly see how many units you must sell to break even.

Enter Your Numbers

Total Fixed Costs ($)

Rent, salaries, software, insurance — costs that don't change with volume.

Variable Cost per Unit ($)

Materials, packaging, per-unit shipping — costs that scale with each sale.

Selling Price per Unit ($)

The amount the customer pays per unit.

Fill in your numbers and click Calculate to see results.

Summary

Enter your fixed costs, variable cost per unit, and selling price to instantly see how many units you must sell to break even.

How it works

Enter your total fixed costs — expenses that do not change with sales volume (e.g., rent, payroll, software).
Enter the variable cost per unit — costs that scale with each unit sold (e.g., materials, fulfillment).
Enter your selling price per unit — the amount the customer pays.
The calculator computes your contribution margin per unit (price minus variable cost).
It then divides fixed costs by the contribution margin to get the break-even quantity.
Results update instantly so you can experiment with different pricing or cost scenarios.

Use cases

Determine how many products to sell before a new e-commerce store becomes profitable.
Evaluate whether a price increase justifies a reduction in expected sales volume.
Stress-test a product launch against pessimistic sales forecasts.
Set monthly sales targets for your team based on cost structure.
Compare break-even points across multiple product SKUs.
Prepare financial projections for investors or lenders.
Decide whether to outsource production (changing variable vs. fixed cost mix).
Validate a subscription pricing model by computing required subscriber count.

Frequently Asked Questions

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Last updated: 2026-05-29 · Reviewed by Nham Vu