Break-Even Units Calculator
Calculate how many units you need to sell to break even, given fixed costs, selling price, and variable cost per unit.
How to use this tool
- Enter total fixed costs, selling price per unit and variable cost per unit in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your break-even units and the full breakdown beneath it.
The break-even point is where total revenue equals total costs. Below break-even you lose money; above it you profit.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Contribution Margin = Selling Price per Unit − Variable Cost per Unit
Break-Even Units = ⌈ Fixed Costs ÷ Contribution Margin ⌉
Break-Even Revenue = Break-Even Units × Selling Price per Unit
(⌈ ⌉ denotes rounding up to the nearest whole unit.)
How it works
This calculator uses the standard cost-volume-profit (CVP) break-even formula. It first computes the contribution margin — the amount each unit sold contributes toward covering fixed costs after variable costs are deducted. Dividing total fixed costs by this margin gives the minimum number of units that must be sold to avoid a loss.
The unit count is always rounded up (ceiling) because you cannot sell a fraction of a unit. If the contribution margin is zero or negative, break-even is impossible at that price and cost structure, and the calculator flags this condition. All figures are pre-tax and do not account for mixed or step-fixed costs.
Worked example
- Fixed costs = $10,000; Selling price = $50/unit; Variable cost = $30/unit.
- Contribution Margin = $50 − $30 = $20 per unit.
- Break-Even Units = ⌈ $10,000 ÷ $20 ⌉ = ⌈ 500 ⌉ = 500 units.
- Break-Even Revenue = 500 × $50 = $25,000.
Break-even units: 500; Contribution margin: $20; Break-even revenue: $25,000.
Common mistakes to avoid
- Including variable costs in fixed costs -- rent is fixed, but raw materials scale with units and must go into the variable cost field.
- Using the revenue figure as selling price per unit when revenue already includes volume, producing a wildly incorrect contribution margin.
- Ignoring stepped fixed costs -- factory capacity may require adding a second shift once volume exceeds a threshold, raising fixed costs and shifting the break-even point.
Key terms
- Contribution margin
- Revenue minus variable costs on a per-unit basis; the amount each sale contributes toward fixed costs and, beyond break-even, toward profit.
- Fixed costs
- Costs that do not change with production volume, such as rent, salaries, and insurance.
- Variable costs
- Costs that scale directly with the number of units produced or sold, such as raw materials and direct labor per unit.
- Break-even point
- The sales volume at which total revenue equals total costs, resulting in neither profit nor loss.
- CVP analysis
- Cost-Volume-Profit analysis — a framework that examines how changes in costs and sales volume affect a company's operating profit.
Frequently asked questions
- What is contribution margin?
- Contribution margin is the selling price minus variable cost per unit. Each unit sold above break-even contributes this amount to profit.
- What are fixed vs. variable costs?
- Fixed costs don't change with production volume (rent, insurance, salaries). Variable costs scale with units sold (materials, commissions, packaging).