Break-Even Calculator
Find break-even units and sales, test expected volume, and calculate the sales needed for a target profit.
Break-even formulas
Break-even analysis separates costs that stay fixed during the selected period from costs that change with each unit. The contribution margin per unit is the selling price minus the variable cost per unit.
Break-even sales = fixed costs ÷ contribution margin ratio
Target-profit units = (fixed costs + target profit) ÷ contribution margin per unit
The U.S. Small Business Administration uses the same unit and sales-dollar formulas and notes that a basic break-even analysis is an estimate built around a single product or service.
Example
With fixed costs of $12,000, a $50 selling price and $20 variable cost, contribution margin is $30 per unit and the break-even point is 400 units or $20,000 in sales. At 500 units, estimated profit is $3,000. A $6,000 target profit requires 600 units or $30,000 in sales.
How to use expected sales and margin of safety
The expected-volume result compares projected revenue with fixed plus variable costs. Above break-even, margin of safety is expected units minus break-even units; below break-even, the calculator reports the unit shortfall. The percentage uses expected units as its base and is unavailable when expected sales are zero.
Important limits
This is a deterministic single-product or constant-sales-mix model. It assumes selling price, variable cost per unit and fixed costs remain constant throughout one consistent period. It does not model step-fixed costs, inventory changes, taxes, financing, capacity constraints, demand, discounts, returns, spoilage, mixed products with changing sales shares, or cash-flow timing. Classifying a semi-variable cost incorrectly can materially change the result. Use actual accounting data and scenario ranges before making a business decision.
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Source
U.S. Small Business Administration — Plan your business and break-even formula.
Customer economics: Use the Customer Lifetime Value Calculator to compare lifetime contribution with acquisition cost and CAC payback.