Break Even Calculator

The four break even analysis inputs are fixed costs, price per unit, variable cost per unit and, optionally, expected unit sales. The calculator runs the formulas the U.S. Small Business Administration publishes (page last modified 8 September 2026): break-even point in units = fixed costs ÷ (sales price per unit − variable cost per unit), and break-even point in sales dollars = fixed costs ÷ contribution margin.

Contribution margin is selling price minus the variable unit cost. The SBA defines the contribution margin ratio as that difference divided by the sale price, so a $50 product with $20 in variable costs carries a 60% ratio. Total costs sum fixed costs and total variable costs, and the break even point sits at the number of units where total revenue equals total costs.

Three more outputs use the cost-volume-profit formulas in OpenStax's Principles of Managerial Accounting:

• Units for a target profit: (fixed costs + target profit) ÷ margin per unit, from section 3.2.
• Profit at expected unit sales: expected units × margin per unit − fixed costs.
• Margin of safety: (expected sales − break-even sales) ÷ expected sales, from section 3.5.

Fixed costs are the costs required to stay open for the period, and they remain constant across its production volume: rent, salaries, insurance, software. Variable costs move with units produced or sold, like raw materials, packaging, card fees & shipping. Total variable costs are the variable unit cost times units sold. Every one of the calculated values comes from your own inputs, and break-even units round up to the next whole unit.

Take a product with a $50 unit price, $20 in variable costs per unit and $12,000 a month in fixed expenses. Each sale contributes $30, a 60% ratio, so the break-even point is 12,000 ÷ 30 = 400 units, or $20,000 in total revenue. Those are the default values in the calculator above.

Expected unit sales of 550 produce 550 × $30 − $12,000 = $4,500 in profit, a margin of safety of 150 ÷ 550 = 27.3%. A $6,000 target needs (12,000 + 6,000) ÷ 30 = 600 units sold. At 300 units the month loses $3,000, and at 800 it makes $12,000.

The sales volume line graph above plots the same month: the total revenue line starts at zero, the total costs line starts at $12,000, and they cross at 400 units. OpenStax runs identical arithmetic on its Hicks Manufacturing example, where a $100 price, a $20 variable cost and $18,000 of monthly fixed costs break even at 225 units, or $22,500 in total revenue. Type those three numbers into the calculator and it returns the same two figures.

The model draws straight lines. Price holds at every volume, variable costs per unit hold as production increases, and fixed costs stay flat. Real costs bend: a supplier discount lowers the variable unit cost past a volume threshold, and a second shift adds a new block of fixed costs. Run the calculator once per cost tier when a step change is coming.

It handles one product at a time. A company's break even point across several products depends on a weighted margin from its sales mix, which shifts as production increases on some lines and drops on others. For a quick read, enter the average price and average variable costs across the range.

Timing sits outside the formula. A month that covers its costs on paper still leaves the bank account short when customers pay on 60-day terms, so don't count your chickens before they hatch: pair the result with a cash-flow forecast or the burn rate calculator. Expected unit sales should trace back to a sizing estimate such as the market potential calculator.

The calculator is a self help tool for illustrative purposes. For decisions tied to your individual circumstances, such as a loan or a lease, take the numbers to an accountant.

Divide total fixed costs by price minus the variable unit cost. With $12,000 of fixed costs, a $50 price and $20 in variable costs, that's 12,000 ÷ (50 − 20) = 400 units. Multiply by the price for break-even revenue: $20,000. Round a fractional answer up, since at 363.6 units the 364th sale is the first one covering fixed costs in full.

A good one sits well below the sales you already make. Measure it with margin of safety against your own trailing sales: if the last six months averaged 450 units, a 400-unit break-even leaves 50 units, or 11.1%, of cushion. When the gap is thin and the fix is pricing, the price optimization tools ranking covers the software built for it.

A break even analysis in Excel takes three cells. Put fixed costs in B1, price per unit in B2 and variable cost per unit in B3. Enter =B1/(B2-B3) for break-even units and =B1/((B2-B3)/B2) for break-even revenue. With a target profit in B4, =(B1+B4)/(B2-B3) returns the number of units to sell. On an existing profit model, Goal Seek (Data > What-If Analysis) sets the profit cell to 0 by changing the units cell.

It rises in step. Adding $3,000 a month of rent to the $12,000 example lifts the break-even point from 400 to 500 units, because each unit still contributes $30 of its selling price toward covering fixed costs.

Cutting variable costs from $20 to $17 a unit lifts the margin to $33 and drops break-even to 364 units (12,000 ÷ 33 = 363.6, rounded up). Each additional unit sold now keeps $33, and the $3 saving cuts 36 units off the monthly target.

Drop this on any page and it renders the calculator above, live, with no login or install. It's free to use; the only ask is leaving the credit link in place.