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Break-Even Calculator

Find your break-even point

Break-Even Point

334 units

Revenue

$16,700

Margin %

60.0%

Time to BE

3.3mo

$

Rent, salaries, insurance, etc.

$
$

Break-Even Point

334 units

= $16,700 in revenue

Contribution Margin

$30.00/unit

CM Ratio

60.0%

Time to Break Even

3.3 months

at 100 units/month

Revenue vs Total Cost

Lines cross at break-even (334 units)

Profit at Different Sales Levels

Relative to break-even (334 units)

84 units(25%)
-$7,480
167 units(50%)
-$4,990
251 units(75%)
-$2,470
334 units(100% (BE))
+$20
501 units(150%)
+$5,030
668 units(200%)
+$10,040

How break-even changes with price adjustments

Formula

Break-Even Units = Fixed Costs / Contribution Margin

= $10,000 / $30.00

= 334 units

Frequently Asked Questions

Q

How do I calculate break-even point?

Break-even (units) = Fixed Costs ÷ (Price - Variable Cost per unit). Example: $10,000 fixed costs, $50 price, $30 variable cost. BEP = $10,000 ÷ ($50-$30) = 500 units. At 500 units, revenue equals costs.

  • Formula (units): Fixed Costs ÷ Contribution Margin
  • Contribution Margin = Price - Variable Cost
  • Formula (dollars): Fixed Costs ÷ CM Ratio
  • CM Ratio = (Price - Variable Cost) ÷ Price
  • Below BEP = Loss, Above BEP = Profit
Fixed CostsPriceVariable CostBEP UnitsBEP Revenue
$10,000$50$30500$25,000
$20,000$100$60500$50,000
$50,000$200$120625$125,000
Q

What is contribution margin?

Contribution Margin = Price - Variable Cost per unit. It's what each sale "contributes" toward covering fixed costs. After fixed costs are covered, CM becomes profit. Higher CM = lower break-even point.

  • Formula: Price - Variable Cost = CM per unit
  • CM Ratio: CM ÷ Price (as percentage)
  • Higher CM = Fewer units needed to break even
  • CM goes to: 1) Cover fixed costs, 2) Then profit
  • Example: $100 price - $60 cost = $40 CM
ProductPriceVariable CostCM per UnitCM Ratio
Product A$50$35$1530%
Product B$100$40$6060%
Product C$200$80$12060%
Service$150$30$12080%
Q

What are fixed costs vs variable costs?

Fixed: Same regardless of sales (rent $3,000, salaries $5,000, insurance $500). Variable: Change with each sale (materials $10/unit, shipping $5/unit, commission 10%). Identifying these correctly improves accuracy.

  • Fixed: Don't change with volume
  • Variable: Change proportionally with sales
  • Semi-variable: Some fixed + variable component
  • Example: Phone bill with base + usage charges
Cost TypeFixed CostsVariable Costs
Rent/LeaseYesNo
Salaries (base)YesNo
CommissionsNoYes
Raw materialsNoYes
Shipping/unitNoYes
Software subscriptionsYesNo
Credit card feesNoYes (% of sales)
Q

How can I lower my break-even point?

Lower BEP by: 1) Reduce fixed costs (negotiate rent, cut subscriptions), 2) Raise prices (if market allows), 3) Lower variable costs (better suppliers, efficiency), 4) Sell higher-margin products.

  • Cutting fixed costs: Fastest impact
  • Raising prices: Powerful if market tolerates
  • Lowering variable costs: Compound effect per unit
  • Focus on highest CM products
StrategyActionBEP ImpactTrade-off
Cut fixed costsRenegotiate rent, reduce staffDirect reductionMay limit capacity
Raise pricesIncrease by 10%Significant reductionMay lose customers
Lower variable costsNew suppliers, efficiencyModerate reductionQuality concerns
Product mixSell high-margin itemsSignificant reductionMay need marketing
Q

How do I calculate break-even for multiple products?

For multiple products, use weighted average CM. Weight each product's CM by its percentage of total sales. Then: Fixed Costs ÷ Weighted Average CM = Break-even units. Or use revenue-based calculation.

  • Weight CM by sales mix percentage
  • Example: 60% Product A ($20 CM) + 40% Product B ($30 CM)
  • Weighted CM = 0.6×$20 + 0.4×$30 = $24
  • BEP = Fixed Costs ÷ $24 per weighted unit
  • Alternatively: Use CM ratio and calculate BEP in dollars
Q

What is margin of safety?

Margin of Safety = Actual Sales - Break-even Sales. It shows how much sales can drop before you start losing money. Higher margin = more buffer. Express as units, dollars, or percentage.

  • Formula: Actual Sales - BEP Sales = Margin of Safety
  • As percentage: (Actual - BEP) ÷ Actual × 100
  • Example: Selling 800 units, BEP 500 = 300 unit margin
  • Percentage: (800-500)/800 = 37.5% margin of safety
  • Higher % = more cushion for downturns
Current SalesBreak-EvenMargin of SafetyMOS %
600 units500 units100 units16.7%
800 units500 units300 units37.5%
1000 units500 units500 units50%

Example Calculations

1Small Business: $10,000 Fixed Costs

Inputs

Fixed Costs (monthly)$10,000
Price per Unit$50
Variable Cost per Unit$20

Result

Break-Even Point334 units
Break-Even Revenue$16,700
Contribution Margin$30.00/unit
CM Ratio60.0%
Profit at 500 units+$5,000
Profit at 1,000 units+$20,000

Contribution Margin = $50 - $20 = $30/unit. Break-Even = $10,000 / $30 = 333.33, rounded up to 334 units. Revenue at BEP = 334 x $50 = $16,700. At 500 units, profit = (500 x $30) - $10,000 = $5,000.

2Larger Operation: $25,000 Fixed Costs

Inputs

Fixed Costs (monthly)$25,000
Price per Unit$80
Variable Cost per Unit$30

Result

Break-Even Point500 units
Break-Even Revenue$40,000
Contribution Margin$50.00/unit
CM Ratio62.5%
Profit at 500 units$0
Profit at 1,000 units+$25,000

Contribution Margin = $80 - $30 = $50/unit. Break-Even = $25,000 / $50 = 500 units exactly. Revenue at BEP = 500 x $80 = $40,000. At 1,000 units, profit = (1,000 x $50) - $25,000 = $25,000.

Formulas Used

Break-Even Point (Units)

Break-Even Units = Fixed Costs / Contribution Margin per Unit

The number of units you must sell to cover all fixed costs. Result is rounded up to the next whole unit.

Where:

Fixed Costs= Total fixed costs (rent, salaries, insurance, etc.)
Contribution Margin= Price per Unit minus Variable Cost per Unit

Contribution Margin

Contribution Margin = Price per Unit - Variable Cost per Unit

The amount each unit sold contributes toward covering fixed costs and generating profit.

Where:

Price per Unit= Selling price of one unit
Variable Cost per Unit= Cost that varies with each unit produced

Contribution Margin Ratio

CM Ratio = (Contribution Margin / Price per Unit) x 100

The percentage of each dollar of revenue that contributes toward fixed costs and profit.

Where:

Contribution Margin= Price minus Variable Cost
Price per Unit= Selling price of one unit

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Last Updated: Feb 12, 2026

This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.

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