Calculating the Break-Even Point

Updated 4 November 2026 · Standard formula, shown below

Break-even point 800 units

Contribution margin per unit: 15.00 $; Result
Break-even revenue: 32,000.00 $; Result
Contribution margin ratio: 37.5 %; Result

This calculator finds the break-even point: how many units you must sell before total revenue covers total cost. Enter fixed costs, the price per unit and the variable cost per unit.

Formula

Contribution margin = price − variable cost. Break-even units = fixed costs ÷ contribution margin, rounded up to a whole unit. Break-even revenue = fixed costs ÷ (contribution margin ÷ price).

fc: fixed costs for the period (rent, salaries, equipment), any currency
pr: selling price per unit
vc: variable cost per unit (materials, packaging, per-unit fees)

Worked Example

Fixed costs 12,000, price 40, variable cost 25.

Contribution margin = 40 − 25 = 15.00 per unit
12,000 ÷ 15 = 800 units
Ratio = 15 ÷ 40 = 0.375 (37.5%)
Break-even revenue = 12,000 ÷ 0.375 = 32,000.00

Limits and common mistakes

If the price is not above the variable cost, there is no break-even point.
Fixed and variable costs must cover the same period and the same product.
The model assumes a constant price and cost per unit; discounts and bulk buying change both.
To include a profit target, add it to the fixed costs: units = (fixed costs + target profit) ÷ contribution margin.

Formula used

in fc | Fixed costs | $ | 12000 | 0
in pr | Price per unit | $ | 40 | 0
in vc | Variable cost per unit | $ | 25 | 0
out units | Break-even point | units | ceil(fc / (pr - vc)) | 0
out cm | Contribution margin per unit | $ | pr - vc | 2
out rev | Break-even revenue | $ | fc / (cm / pr) | 2
out ratio | Contribution margin ratio | % | cm / pr * 100 | 1

Each line is one input (in, sel, list) or one result (out: label, unit, formula, decimals). How the calculators work

Method: the standard formula for this calculation, rounded as each result states. See how the calculators work or report an error.