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Break-Even Calculator

Find how many sales it takes to cover your costs, in units and in dollars. Add a profit goal to see the sales you need to reach it.

Level: Grades 7–8

  • Common Core standard 7.EE.B.4.aSolve word problems leading to equations of the form px + q = r and p(x + q) = r, where p, q, and r are specific rational numbers. Solve equations of these forms fluently. Compare an algebraic solution to an arithmetic solution, identifying the sequence of the operations used in each approach.
Printable worksheet

Break-Even Calculator

Inputs

Costs that don't change with sales volume, for the period.

Costs that rise with each unit sold.

Leave blank to see break-even only.

Result

Break-even units (rounded up)

1,000

You need to sell 1,000 units ($25,000.00 of revenue) to cover $10,000.00 of fixed costs.

Break-even units (exact)
1,000
Break-even revenue
$25,000.00
Contribution margin per unit
$10.00
Contribution margin ratio
40%

See the step-by-step solution ↓

Step-by-step solution

  1. Find what each sale leaves over to pay fixed costs: the price minus the variable cost

    $25.00−$15.00=$10.00

  2. Divide the fixed costs by that amount to see how many sales it takes to cover them

    $10,000.00$10.00=1,000

  3. That's already a whole number of units

    1,000=1,000

  4. Multiply the break-even units by the price to get the sales in dollars

    1,000×$25.00=$25,000.00

  5. Find the contribution margin ratio: the share of each sale's price left after variable costs

    $10.00$25.00×100=40%

Test yourself

20 quick questions built from this calculator's formula: work out results, predict what happens when an input changes, and work backward from an answer. Every answer comes with the working.

Please note: Results are estimates for planning and comparison. Lenders, banks, and tax authorities may round differently or include fees not modeled here, so confirm figures with your provider before deciding.

What this calculator does

Find out how many sales you need before your business stops losing money. That point is called break-even. It's where your total sales income (revenue) exactly covers two kinds of cost. Fixed costs, like rent, stay the same however much you sell. Variable costs, like materials, come with every unit you sell. Below break-even you're losing money, and every unit above it adds profit.

Enter your fixed costs for a period, the price you charge per unit, and what each unit costs you to make or deliver. The calculator shows the break-even units and revenue, and how much each sale chips in. If you enter a target profit, it also shows the sales you need to reach it.

Where it's used

Why this math matters outside the classroom:

  • Small business pricing. A product with $3,000 of fixed costs, a $25 price and $10 of variable cost per unit breaks even at 200 units.
  • Bake sale planning. Student groups divide booth and supply costs by the profit per item to know how many items they must sell.
  • Testing a price change. Raising the price from $25 to $30 in the same example lowers the break-even point from 200 to 150 units.
  • Event budgets. Organizers divide a venue's fixed fee by the profit per ticket to find the attendance needed to cover costs.

Grade level and standards: Grades 7–8; Common Core State Standards for Mathematics 7.EE.B.4.a. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.

How to use it

  1. Enter your fixed costs for the period you care about, such as one month of rent, salaries, insurance and software.
  2. Enter the selling price per unit and the variable cost per unit (materials, packaging, per-sale fees, hands-on labor).
  3. If you like, enter a target profit for the same period.
  4. Read the break-even units (rounded up to a whole unit), the break-even revenue and the units you need for your target.

What the inputs mean

Fixed costs
Costs you pay no matter how much you sell in the period. Use the same period, such as a month or a year, for the target profit.
Selling price per unit
The average amount you get for each unit, after discounts and before sales tax.
Variable cost per unit
Costs that rise with each unit you sell. This must be lower than the price, or there's no break-even point at all.
Target profit (optional)
The profit you want left over after all your costs. Leave it blank to see only the break-even point.

Formula and method

contribution per unit = price − variable cost
break-even units = fixed costs ÷ contribution per unit
break-even revenue = break-even units × price = fixed costs ÷ (contribution ÷ price)
units for target profit = (fixed costs + target profit) ÷ contribution per unit

Every unit you sell brings in its price, but it also costs you its variable cost. What's left is called the contribution margin, and it goes toward paying the fixed costs. Once enough of these contributions add up to your fixed costs, you've broken even.

The exact break-even number is often a fraction. You can only sell whole units, so the main result is rounded up to the next whole number. Break-even revenue uses the exact figure. So it equals fixed costs divided by the contribution margin ratio, the share of each sale's price that's left after variable costs.

Worked example

A small bakery has $10,000 of fixed costs a month. It sells cakes for $25 and spends $15 on ingredients and boxes for each one. It also wants $5,000 of profit a month.

  1. Contribution per cake: $25 − $15 = $10.
  2. Break-even units: $10,000 ÷ $10 = 1,000 cakes.
  3. Break-even revenue: 1,000 × $25 = $25,000. The contribution margin ratio is $10 ÷ $25 = 40%.
  4. For $5,000 of profit: ($10,000 + $5,000) ÷ $10 = 1,500 cakes, or $37,500 of revenue.

Result: The bakery breaks even at 1,000 cakes ($25,000 of sales) a month. It reaches its $5,000 profit target at 1,500 cakes ($37,500).

Understanding the result

A lower break-even point means less risk, because you need fewer sales before the business is safe. You can lower it by raising the price, cutting the variable cost per unit or trimming fixed costs.

The contribution margin ratio shows how much of each sales dollar goes toward fixed costs and profit. At 40%, every extra $100 of sales above break-even adds $40 of profit.

Compare the break-even units with what you can realistically sell. If break-even is more than you can make or sell, the plan needs to change. It's far better to find that out here than after you've started.

Assumptions and limitations

  • The price and variable cost per unit stay the same at every sales level (costs follow a straight line).
  • Fixed costs stay the same within the period, and everything you make gets sold.
  • You sell one product, or a steady average across a mix of products.
  • Taxes on profit aren't included; the target profit is before income tax.
  • Real costs often jump at higher sales levels, such as another employee or a bigger space. Buying in bulk can also lower variable costs. Rerun the numbers for each range of sales.
  • For several products with different margins, the result depends on how much of each you sell. Use an average price and variable cost, weighted by how much each sells. Or work out each product separately.
  • Break-even says nothing about when cash arrives. You can be above break-even and still run short of cash if customers pay late.

Frequently asked questions

What if my price is lower than my variable cost?

Then each sale loses money before you even count fixed costs, so more sales only make the loss bigger. There's no break-even point. The calculator shows an error, and you'll need a higher price or a lower variable cost.

Why is the break-even unit count rounded up?

You can't sell part of a unit, and selling one fewer than the exact figure leaves you just short. Rounding up gives the first whole number of units where profit is zero or better. The exact figure is shown too.

What counts as a fixed cost?

Anything you pay for the period no matter how much you sell: rent, base salaries, insurance, loan payments, subscriptions and the like. Costs that grow with each sale, such as materials, packaging, shipping and payment fees, are variable.

How do I find break-even for a service business?

Treat one hour, one job or one client as a unit. Use the price you charge for it. For the variable cost, use what it directly costs you to deliver it, such as contractor pay and supplies.

How this calculator is checked

Method: Standard cost-volume-profit (CVP) break-even analysis: units = fixed costs ÷ (price − variable cost per unit). The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.

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