Break-Even Calculator

Break-even in units equals fixed costs divided by (price per unit minus variable cost per unit). The difference between price and variable cost is called the contribution margin. Break-even revenue equals break-even units multiplied by the selling price.

If variable cost exceeds the selling price, you lose money on every unit sold and can never break even. You would need to either raise your price, reduce variable costs, or reconsider the product entirely. The contribution margin must be positive to reach break-even.

Reduce fixed costs by negotiating rent, outsourcing, or going remote. Lower variable costs through better supplier deals or more efficient processes. Raise prices if the market allows it. Each of these improves your contribution margin or reduces the amount you need to cover.

Fixed costs stay the same regardless of sales volume (rent, salaries, insurance). Variable costs change with each unit sold (materials, shipping, commissions). Some costs are semi-variable, like utilities, and should be split into their fixed and variable components for accurate analysis.