Calculator
Enter all monetary amounts in the same currency. The calculator returns ratios and amounts in that same basis.
Method and inputs
Formula: break-even units = fixed costs / (unit price - variable cost per unit)
Inputs: Fixed costs, selling price per unit and variable cost per unit.
Worked example
With $5,000 fixed costs, a $50 selling price and $20 variable cost, contribution is $30 per unit and break-even is 166.67 units ($8,333.33 of sales).
How price changes move the break-even point
Using the worked example ($5,000 fixed costs, $20 variable cost per unit), small price changes shift break-even sharply because they change the contribution per unit.
| Price per unit | Contribution per unit | Break-even units | Break-even sales |
|---|---|---|---|
| $40 | $20 | 250 | $10,000 |
| $45 | $25 | 200 | $9,000 |
| $50 | $30 | 167 | $8,350 |
| $55 | $35 | 143 | $7,865 |
| $60 | $40 | 125 | $7,500 |
| $70 | $50 | 100 | $7,000 |
Round break-even units up: you cannot sell two-thirds of a unit, so 166.67 units means 167 sales. The margin of safety, (expected sales − break-even sales) / expected sales, shows how far sales can fall before the business makes a loss.
Important limits
This is a contribution-margin estimate. It assumes a constant price and variable cost, and excludes taxes, financing, capacity limits, inventory timing and changes in sales mix.