What is the break-even point?

It is the number of units, or amount of revenue, at which total sales exactly cover total costs — no profit and no loss. Every unit sold beyond the break-even point adds its full contribution margin straight to profit, which is why break-even analysis is the first step in pricing and budgeting decisions.

How do I calculate break-even units?

Divide fixed costs by the contribution margin per unit, where contribution margin is the price minus the variable cost. For example, fixed costs of 12,000 divided by a 24 contribution margin equals 500 units. The calculator rounds up, because you cannot sell a fraction of a unit and still cover every cost.

What is contribution margin and why does it matter?

Contribution margin is the selling price minus the variable cost of one unit — the amount each sale contributes towards fixed costs first, and then profit. A high contribution margin means you reach break-even on fewer sales. The ratio version (contribution divided by price) lets you convert a break-even unit figure into a break-even revenue figure directly.

How do I find the units needed for a target profit?

Add the target profit to fixed costs, then divide by the contribution margin per unit: (fixed costs + target profit) divided by contribution. The calculator does this automatically whenever you enter a target profit, and shows both the unit count and the revenue it represents.

What is the margin of safety?

The margin of safety is how far your planned or actual sales sit above the break-even point. If you break even at 500 units and plan to sell 800, your margin of safety is 300 units, or 37.5 percent. A larger margin of safety means sales can fall further before you slip into a loss, so it is a useful risk gauge.

Why does the calculator need a positive contribution margin?

If the variable cost per unit is equal to or higher than the price, each sale loses money before any fixed cost is even considered, so no quantity of sales can ever reach break-even. In that case the calculator tells you there is no break-even point and suggests raising the price or cutting the variable cost.

Is my pricing data kept private?

Yes. The calculator runs entirely in your browser using your own entered numbers. Your costs, prices, targets and planned volumes are never uploaded, and the only thing stored is a local draft in your own browser so the page remembers your last figures.

Break-Even Calculator

A break-even calculator works out exactly how many units you need to sell before your business stops losing money and starts making it. Enter your fixed costs, the price per unit and the variable cost per unit, and the tool returns your break-even units, your break-even revenue and your contribution margin — then draws a chart so you can see precisely where revenue overtakes total cost. It is built for founders pricing a new product, shop owners checking whether a line pays for itself, and anyone writing a budget who needs a defensible sales target rather than a guess.

How it works

Every break-even calculation rests on one number, the contribution margin per unit. That is the price minus the variable cost — the slice of each sale left over to chip away at fixed costs.

contribution = price − variable cost

Once you know the contribution, the rest follows directly:

break-even units = fixed costs ÷ contribution break-even revenue = break-even units × price units for a target profit = (fixed costs + target profit) ÷ contribution

The contribution margin ratio is contribution ÷ price, expressed as a percentage. Multiplying fixed costs by the inverse of that ratio gives break-even revenue in one step. The calculator also reports a margin of safety when you enter a planned sales volume: it is the gap between that volume and the break-even point, shown both in units and as a percentage, so you can see how much sales could drop before a loss.

Worked example

Suppose your fixed costs for the year are 12,000 (rent, software and a part-time salary), you sell each unit for 40, and each unit costs 16 in materials, packaging and card fees.

Contribution margin = 40 − 16 = 24 per unit (a 60% margin)
Break-even units = 12,000 ÷ 24 = 500 units
Break-even revenue = 500 × 40 = 20,000
For a 6,000 target profit: (12,000 + 6,000) ÷ 24 = 750 units
If you plan to sell 900 units, your margin of safety is 900 − 500 = 400 units (44%)

Metric	Value
Contribution margin	24 (60%)
Break-even units	500
Break-even revenue	20,000
Units for 6,000 profit	750

A note on the formula

The model assumes a single product (or a stable average unit), a constant selling price, and variable costs that scale linearly with volume. It does not model step changes in fixed costs, bulk-buying discounts or tax — for those, run separate scenarios by adjusting the inputs. All maths happens locally in your browser, so your numbers stay private and the page works with no connection.