Break Even Calculator: Units and Sales
Find how many units you must sell to cover your fixed costs, the sales value at break even, your margin of safety and the units for a target profit.
Break even units
667units
Break even sales
30,000
Contribution per unit
18
Contribution margin: 40 %
Profit at expected units
4,200
Margin of safety
25.9%
Break even units = fixed costs ÷ (price − variable cost per unit)
How to calculate the break even point
The break even point is the sales level where income covers all costs, so profit is zero. Below it you lose money; every unit above it adds its contribution to profit. Knowing it tells you whether a product, a price or a new shop can work.
How to calculate the break even point
Break even units = fixed costs ÷ (price − variable cost per unit). The bottom part is the contribution each unit makes towards fixed costs.
Example: rent and salaries of 12,000 a month, a selling price of 45 and a variable cost of 27 per unit. Contribution = 18, so break even = 12,000 ÷ 18 = 667 units a month, or 30,000 in sales.
Terms used
| Term | Meaning |
|---|---|
| Fixed costs | Costs that do not change with volume: rent, salaries, insurance, software |
| Variable cost | Cost per unit sold: goods, packing, shipping, payment fees, commission |
| Contribution margin ratio | Contribution ÷ price; break even sales = fixed costs ÷ this ratio |
| Margin of safety | How far sales can fall before you make a loss |
To lower the break even point, raise the price (check it with the markup calculator), cut variable costs or cut fixed costs.
Copy the result, or save it as a PDF to attach to an email or a purchase file. Nothing you type leaves your browser.
Features
- Break even units
- Break even sales
- Contribution margin and ratio
- Profit at expected sales
- Margin of safety
- Units for a target profit
Frequently asked questions
What is the break even point formula?
Fixed costs divided by the contribution per unit (price minus variable cost). For sales value, divide fixed costs by the contribution margin ratio.
What counts as a variable cost?
Anything that rises with each unit sold: purchase cost, packaging, shipping, card fees and sales commission.
How do I include a profit target?
Add the target profit to the fixed costs: (fixed costs + target) ÷ contribution per unit. The calculator does it in the target field.
Is the calculator free?
Yes. No sign up. It runs in your browser, and you can copy the result or save it as a PDF.