Break-Even Calculator
222
Break-Even Units
$16,667
Break-Even Revenue
Analysis
Contribution Margin / Unit $45.00
Contribution Margin % 60.0%
Margin of Safety (units) 278
Margin of Safety % 55.6%
Profit at Expected Units $12,500
About
The Break-Even Calculator determines the exact number of units you must sell — and the revenue you must generate — before your business starts making a profit. Enter your fixed costs (rent, salaries, software subscriptions — costs that do not change with volume), variable cost per unit (materials, commissions — costs that scale with each sale), and selling price per unit. The tool instantly computes the break-even point, contribution margin, and if you enter expected sales volume, shows the margin of safety and projected profit or loss. Break-even analysis is a fundamental tool for pricing decisions, new product launches, and business planning.
How to use
- 1 Enter your total fixed costs for the period (e.g. monthly rent, salaries, subscriptions).
- 2 Enter the variable cost per unit — costs that change with each unit sold (materials, packaging, commissions).
- 3 Enter your selling price per unit.
- 4 Enter expected units sold to see the margin of safety and profit at that volume.
- 5 Review the break-even units, break-even revenue, and contribution margin in the results panel.
- What is the contribution margin and why does it matter?
- The contribution margin is the selling price minus the variable cost per unit: it is the amount each unit "contributes" toward covering fixed costs and then generating profit. A higher contribution margin means you break even faster. If the contribution margin is negative — meaning variable cost exceeds selling price — you lose money on every sale and cannot break even regardless of volume.
- What is the margin of safety?
- The margin of safety is the difference between your expected (or actual) sales volume and the break-even volume. It represents how far sales can fall before you start losing money. A margin of safety of 20% means sales can drop by 20% before you reach break-even. It is expressed both in units and as a percentage of expected volume.
- How do I use break-even analysis for pricing decisions?
- Break-even analysis shows you the minimum viable price given your cost structure. If the break-even volume at a certain price is higher than your realistic market demand, the price is too low. Raise the price to reduce the break-even point — but balance this against how price-sensitive your customers are. You can also use it in reverse: if you know the volume you can sell, work out the minimum price needed to be profitable.