Break-Even Calculator

Contribution per unit is the selling price left after paying the variable cost of one unit. It is not the same as final profit: before break-even, contribution pays down fixed costs; after break-even, it contributes toward operating profit, assuming the inputs remain unchanged.

Break-even analysis is a planning model. If prices, discounts, product mix, or costs change with volume, calculate additional scenarios rather than treating one result as a forecast.

Fixed costs are what the business pays for the period regardless of how many units it sells — rent, salaries, software subscriptions, insurance. Variable costs rise with each unit: materials, packaging, per-order shipping, payment fees, and sales commission.

Misclassifying a cost changes the answer. Putting a per-order fee into fixed costs overstates the target at low volume; leaving it out of variable cost overstates contribution and understates the target.

The calculator shows two unit figures. The raw result is the exact point where contribution equals fixed costs, often a fraction. The actionable result rounds that up to the next whole unit, because 83.33 units cannot be sold and 83 units would leave costs uncovered.

Break-even revenue uses the raw figure, not the rounded one. With $5,000 fixed costs, a $100 price, and $40 variable cost, revenue at break-even is 83.33 × $100 = $8,333.33. Using 84 units would give $8,400, which already includes a small profit and is no longer the break-even point.

A second example: $1,000 in fixed costs, a $12 price, and a $4.50 variable cost give $7.50 contribution per unit. Exact break-even is $1,000 ÷ $7.50 = 133⅓ units, so the minimum whole-unit target is 134. Exact break-even revenue is 133⅓ × $12 = $1,600, calculated at full precision rather than from the rounded display value 133.33.

Selling 134 units brings in 134 × $12 = $1,608 — $8 of additional revenue above the theoretical break-even revenue. That $8 is not profit: variable costs at 134 units are 134 × $4.50 = $603, and $1,608 − $603 − $1,000 in fixed costs leaves an actual surplus of $5.

Zero fixed costs: when contribution per unit is positive, break-even is 0 units and $0 revenue — every sale contributes to profit from the first unit. Zero fixed costs do not override a non-positive contribution.

When the selling price is equal to or below the variable cost per unit, each sale contributes nothing or loses money, so no break-even point exists. The calculator reports this as not available rather than showing a misleading number; the price or the variable cost has to change first.

The model assumes one product (or a stable average), a constant price, and constant costs across the whole volume range. It does not account for volume discounts, stepped fixed costs such as a second location, taxes, financing, or timing of cash flows. For multi-product businesses, use a weighted average contribution or run each product separately.