Break-Even Analysis Calculator
Find the sales volume and revenue where a product or business stops losing money.
Formula
break-even units = fixed costs / (price − variable cost per unit)
Tips
- Contribution per unit is what each sale adds towards covering fixed costs. Until fixed costs are covered, every sale reduces the loss rather than creating profit.
- Margin of safety is how far sales can fall before you hit break-even. Below about 20% the business is fragile to a bad quarter.
- High operating leverage — large fixed costs, small variable costs — magnifies both profit and loss when volume moves.
Frequently asked questions
Which costs count as fixed?
Costs that do not change with output over the period: rent, salaries, insurance, software subscriptions. Materials, shipping and per-unit commission are variable. Costs that step up at intervals, such as an extra shift, are semi-fixed and need modelling at each step.