Your break-even point is the moment your sales finally cover all your costs. This free break-even calculator uses your fixed costs, variable cost per unit and selling price to show the units and revenue you need. Add a profit goal or expected sales to see the extra units required, your profit or loss, and your margin of safety, all on a clear chart.
How to use:
- Enter your total fixed costs.
- Enter the variable cost and selling price per unit.
- Optionally add a target profit and expected units sold.
- Click Calculate to see the break-even units, revenue and chart.
Q: What is the break-even point?
A: It is the number of units, or amount of revenue, at which your total income equals your total costs. Below it you make a loss, and above it you make a profit.
Q: How do I calculate break-even units?
A: Divide your fixed costs by the contribution per unit (selling price − variable cost per unit). With $10,000 of fixed costs and a $13 contribution, you need about 770 units.
Q: What are fixed and variable costs?
A: Fixed costs stay the same however much you sell, such as rent, salaries and software. Variable costs rise with each unit sold, such as materials, packaging and shipping.
Q: What is margin of safety?
A: It shows how far your expected sales are above break-even, as a percentage. A higher margin of safety means your business can handle a sales drop before losing money.
