Contribution per unit
Selling price minus variable cost. Each sale contributes this amount toward fixed costs, then profit.
Price − Variable cost
Business fundamentals
Know the point where costs become profit.
Enter your costs and unit economics to find the sales volume and revenue needed to break even.
Break-even calculator
02 / Result
Break-even point
— units
Enter valid values, then calculate your break-even point.
- Exact break-even
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- Break-even revenue
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- Contribution / unit
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- Contribution margin
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At — planned units
Projection
Projected profit
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Margin of safety
—
Whole units are rounded up because a fraction of a unit cannot fully cover costs.
The method
One decision, four useful numbers.
Break-even units
Fixed costs divided by contribution per unit. The practical result is rounded up to a whole unit.
Fixed costs ÷ Contribution
Break-even revenue
Fixed costs divided by the contribution margin ratio. This is the exact revenue threshold.
Fixed costs ÷ Margin ratio
Reading the result
What your break-even point tells you.
Use one consistent period
If fixed costs are monthly, expected unit sales must also be monthly. Mixing monthly costs with annual sales makes the answer meaningless.
Include truly variable costs
Packaging, payment fees, shipping subsidies, and sales commissions are easy to miss. Include every cost that rises with each unit.
Remember the model’s limit
The calculation assumes price and variable cost stay constant. Recalculate when discounts, capacity, or supplier costs change.
Common questions
Break-even essentials.
What if variable cost is higher than selling price?
You lose money on every unit, so there is no finite break-even point. Raise the price or lower the variable cost before using sales volume as a path to profitability.
Should fixed costs include my salary?
Include any salary the business must cover during the chosen period, including a reasonable owner salary when it is part of your operating plan.
Why are break-even units rounded up?
The exact formula can return a fraction, but most products are sold as whole units. Rounding down would leave a small loss, so the practical target rounds up.