Financial Calculators
Break-Even Calculator
Find the number of units and sales revenue needed to cover fixed and variable costs. You can also add a target profit and compare the result with current sales volume.
Calculate your operating break-even point
Break-Even Calculator
Estimate the sales volume at which contribution covers fixed costs. This model assumes one product or a consistent unit mix.
- Contribution Margin per Unit
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- Contribution Margin Ratio
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- Exact Mathematical Units
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- Break-Even Revenue
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- Target-Profit Units
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- Target-Profit Revenue
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- Current Revenue
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- Current Estimated Profit / Loss
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- Units Above / Below Break-Even
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- Margin of Safety
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- Margin of Safety %
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Results are planning estimates and do not include taxes, financing, demand changes, or multi-product weighted contribution margins.
Your calculation is processed in your browser and is not stored by this tool.
The result uses only the costs, price and volume you enter. It is a planning estimate, not accounting, tax or investment advice.
How to use the break-even calculator
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Enter total fixed costs for the period you want to study.
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Enter the selling price and variable cost for one unit.
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Add an optional target profit to find the sales needed beyond break-even.
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Enter current or expected sales volume if you want a profit and margin-of-safety check.
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Review break-even units, revenue, contribution margin and the target-profit result.
How the break-even calculation works
Contribution per unit is the selling price minus the variable cost per unit. Break-even units equal fixed costs divided by contribution per unit. The calculator rounds the displayed unit target up because selling part of a unit is usually not practical. Break-even revenue is the exact break-even quantity multiplied by the selling price.
The contribution-margin ratio is contribution per unit divided by selling price. It shows how much of each sales dollar remains to cover fixed costs and then profit. If the selling price is equal to or below the variable cost, each extra sale contributes nothing toward fixed costs, so a valid operating break-even point cannot be calculated.
Break-even example
A business has $20,000 in fixed costs, sells each unit for $100 and has a $60 variable cost per unit. Contribution is $40 per unit and the contribution-margin ratio is 40%. The business reaches break-even at 500 units, equal to $50,000 in revenue.
If the target profit is $10,000, the required volume becomes 750 units, or $75,000 in sales. At a current volume of 650 units, modeled profit is $6,000 and the margin of safety is 150 units.
Fixed costs, variable costs and selling price
Use costs from the same time period. Fixed costs may include rent, salaried administration and subscriptions that do not change directly with each unit. Variable costs can include materials, per-unit packaging, sales commissions and transaction charges. For a service business, one unit can be an appointment, billable hour, subscription or project if the price and direct cost are defined consistently.
What the margin of safety means
Margin of safety compares current volume with break-even volume. A positive result shows how far sales could fall before the model reaches break-even. A negative result shows the shortfall that would need to be closed. This figure is based on the entered assumptions; changing price, product mix or costs changes the result.
Important limitations
- Operating scope: this is a business cost-volume-profit calculator, not a Social Security, mortgage-points or trading break-even tool.
- Constant inputs: price and variable cost are assumed to stay constant across all units.
- Single-unit model: a business with several products should use a reliable weighted-average contribution margin.
- Capacity and demand: the calculation does not prove that the target volume can be produced or sold.
- Taxes and financing: tax, loan payments and cash-flow timing are not modeled unless included in your inputs.
Related tools
Break-Even Calculator FAQ
What is the break-even formula?
Break-even units equal fixed costs divided by selling price minus variable cost per unit.
Why are break-even units rounded up?
A whole additional unit is normally required to cover the final fraction of fixed cost.
Can I calculate a target profit?
Yes. The target is added to fixed costs before dividing by contribution per unit.
What is contribution margin?
It is the amount from each sale left after variable cost to cover fixed costs and profit.
Can I use this for a service business?
Yes. Define one consistent service unit, price and direct variable cost.
Does break-even guarantee profitability?
No. It is an estimate based on constant inputs and does not measure demand, capacity or cash-flow timing.
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