How to use this calculator
Find out how many units you need to sell before revenue covers your fixed and variable costs.
How the calculation works
- Subtracts variable cost from selling price to get contribution margin.
- Divides fixed costs by contribution margin.
- Multiplies break-even units by selling price to estimate break-even revenue.
Formula
Break-even units = fixed costs / (selling price per unit - variable cost per unit).
Example
With 5,000 fixed costs, a 50 price, and 20 variable cost, break-even is about 167 units.
Understanding your result
Use the break-even units as the point where modeled revenue covers modeled costs. Profit starts only after costs are covered under those assumptions.
Assumptions and limitations
- If variable cost is greater than or equal to selling price, break-even cannot be reached under those inputs.
- This model assumes one product price and one variable cost.
Frequently asked questions
What if variable cost is higher than price?
The model cannot reach break-even because each unit loses money before fixed costs are covered.
Can this handle multiple products?
No. It uses one selling price and one variable cost per unit.