Calculate break-even units and revenue, contribution margin, target-profit sales, expected profit, and margin of safety — with a viability verdict, scenario comparison, sensitivity tables, a break-even chart, and a formula-backed XLSX workbook. Built for small businesses, startups, ecommerce sellers, service providers, manufacturers, restaurants, and agencies.
Educational estimate only — not accounting, tax, or financial advice. Verify against your own records.
Break-even is the sales level where total revenue equals total cost. Break-even units = fixed costs ÷ contribution margin per unit, where the contribution margin is the selling price minus the variable cost of one sale. With $18,000 of monthly fixed costs, an $80 price, and a $35 variable cost, each sale contributes $45 — so break-even is 400 units ($32,000 of revenue), and a $5,000 profit target needs 512 units.
Calculator
Simple
$
Rent, salaries, insurance, software — costs that don't change with each sale.
$
$
Materials, packaging, fees, commissions — costs that rise with each sale.
$
Enables expected profit, margin of safety, and the viability check.
$
Shown as a payback volume — kept separate from period fixed costs.
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Results · monthly
Watch
Break-even units
400
Sell this many units per period to cover fixed costs.
Break-even revenue
$32,000
The sales value where revenue equals total cost.
Contribution margin / unit
$45.00
Price − variable cost: what each sale contributes.
To hit the target at the current price and volume.
Max fixed costs allowed
$17,500
The heaviest overhead this plan can carry.
Profit per unit after break-even
$45.00
Each sale beyond break-even adds the contribution margin.
12 sheets generated from your inputs with live formulas: break-even engine, target profit, scenarios, sensitivity tables, multi-product analysis, fixed/variable cost breakdowns, and assumptions.
What your break-even result means
Plain-English reading of the current numbers — planning signals, not verdicts.
Moderate safety buffer
Sales can fall 20.0% before the plan dips below break-even — workable, but watch demand closely.
Break-even chart
Revenue and total cost as volume grows — they cross at the break-even point. Profit is the gap between them.
RevenueTotal cost (fixed + variable)Profit⊙ Break-even at ~400 units
Show chart data as a table
Break-even chart data
Units
Revenue
Total cost
Profit
0
$0
$18,000
−$18,000
125
$10,000
$22,375
−$12,375
250
$20,000
$26,750
−$6,750
375
$30,000
$31,125
−$1,125
500
$40,000
$35,500
$4,500
625
$50,000
$39,875
$10,125
750
$60,000
$44,250
$15,750
875
$70,000
$48,625
$21,375
1,000
$80,000
$53,000
$27,000
Contribution margin waterfall
Selling price minus each variable-cost component — what is left is the contribution margin that pays for fixed costs.
Selling price
$80.00
− Variable cost
−$35.00
= Contribution margin
$45.00
Margin of safety
How far sales can fall before the plan dips below break-even. Bands: under 10% very thin · 10–25% moderate · above 25% healthier.
0%10%25%50%+
Margin of safety: 20% — sales can fall this far before the plan turns loss-making.
Scenario comparison
Conservative, base, and optimistic cases — and which single lever improves profit most.
Which lever helps most: raise price 10% adds about $4,000 of profit at your expected volume — more than sell 10% more units, cut fixed costs 10%, cut variable cost 10%. (Each lever tested alone at 10%.)
Sensitivity analysis
How break-even and profit move when one assumption changes and the rest stay put. The centre row of each table is your current position.
Price sensitivity
Price sensitivity
Change
Price
CM / unit
BE units
Expected profit
-20%
$64.00
$29.00
620.7
−$3,500
-10%
$72.00
$37.00
486.5
$500
0%
$80.00
$45.00
400
$4,500
+10%
$88.00
$53.00
339.6
$8,500
+20%
$96.00
$61.00
295.1
$12,500
Variable cost sensitivity
Variable cost sensitivity
Change
Var. cost
CM / unit
BE units
Expected profit
-20%
$28.00
$52.00
346.2
$8,000
-10%
$31.50
$48.50
371.1
$6,250
0%
$35.00
$45.00
400
$4,500
+10%
$38.50
$41.50
433.7
$2,750
+20%
$42.00
$38.00
473.7
$1,000
Fixed cost sensitivity
Fixed cost sensitivity
Change
Fixed costs
CM / unit
BE units
Expected profit
-20%
$14,400.00
$45.00
320
$8,100
-10%
$16,200.00
$45.00
360
$6,300
0%
$18,000.00
$45.00
400
$4,500
+10%
$19,800.00
$45.00
440
$2,700
+20%
$21,600.00
$45.00
480
$900
Profit at different volumes
Profit at different volumes
% of expected
Units
Revenue
Profit / loss
25%
125
$10,000
−$12,375
50%
250
$20,000
−$6,750
75%
375
$30,000
−$1,125
100%
500
$40,000
$4,500
125%
625
$50,000
$10,125
150%
750
$60,000
$15,750
200%
1,000
$80,000
$27,000
Break-even units grid — price vs variable cost
Break-even units when price and variable cost change
Price ↓ / Cost →
-20%
-10%
0%
+10%
+20%
-20%
500
554
621
706
818
-10%
409
444
486
537
600
0%
346
371
400
434
474
+10%
300
319
340
364
391
+20%
265
279
295
313
333
— means break-even is impossible at that combination (variable cost reaches the price).
Quick answers
How do I read my break-even result?
The sales level where total revenue equals total cost — fixed plus variable. Below it you lose money; above it, each additional sale adds roughly the contribution margin per unit to profit.
Break-even formula
Break-even units = Fixed costs ÷ Contribution margin per unit, where contribution margin = selling price − variable cost per unit. Break-even revenue = break-even units × price (equivalently, fixed costs ÷ contribution margin ratio).
What single number drives these results?
Selling price minus variable cost per unit — the amount each sale contributes toward fixed costs, and after break-even, toward profit. As a ratio: contribution margin ÷ price.
Why does my result say “Not possible”?
It appears when variable cost per unit is equal to or higher than the selling price, so the contribution margin is zero or negative — every sale loses money before fixed costs, and no volume can break even until price rises or cost falls.
Break-even analysis, explained
What break-even analysis tells you
Break-even analysis finds the sales level where a product or business stops losing money and starts covering its costs. Below that point you operate at a loss; above it, each additional sale begins to build profit. It is the fastest honest answer to the founder question: how much do we need to sell just to survive?
It is most valuable when pricing a new product, planning a launch, taking on new fixed costs (a hire, a lease), or sanity-checking a business idea before money is committed. The point is not the single number — it is comparing that number against realistic demand.
How the formula works
The engine of break-even is contribution margin: selling price minus variable cost per unit. That margin is what each sale contributes toward covering fixed costs. Break-even units are simply fixed costs divided by the contribution margin per unit, and break-even revenue is that volume at your price.
To plan for profit rather than survival, add a target profit to fixed costs before dividing. And to judge risk, compare expected sales against break-even: the gap — the margin of safety — is how much demand can disappoint before the plan turns loss-making.
Reading the result
Break-even units tell you the volume to clear before profit begins; break-even revenue translates that into a sales-dollar target. Comparing those figures to realistic demand is the real test of whether a plan is viable — which is why this calculator asks for expected volume and turns the comparison into a viability verdict.
If the break-even volume looks far above what you can plausibly sell, that is an early warning. It usually means the price is too low, variable costs are too high, or the fixed-cost base needs trimming before the plan can work. The scenario section shows which of those levers moves profit most for your numbers.
How to use this break-even calculator
Pick a mode. Simple for one product, Detailed Costs for a full fixed/variable breakdown, Service for clients/projects/hours, Ecommerce for fees and CAC, Multi-Product for a sales mix, or Solve For to work backwards from a goal.
Enter your fixed costs. Rent, salaries, insurance, software, loan payments — the per-period overhead that does not change with each sale.
Enter price and variable cost. The selling price per unit and the costs that rise with each sale: materials, packaging, shipping, payment and platform fees, commissions.
Add a target profit and expected volume. The target turns break-even into a profit plan; the expected volume enables the expected-profit, margin-of-safety, and viability checks.
Compare break-even with realistic demand. The viability chip, the diagnosis cards, and the break-even chart show whether your expected sales actually clear the bar — and how much buffer you have.
Test scenarios and download the workbook. Stress-test conservative and optimistic cases, see which lever (price, variable cost, fixed cost, volume) helps most, and export the 12-sheet XLSX with live formulas.
Break-even formulas
Contribution margin
CM = Price − Variable cost per unit
What each sale contributes toward fixed costs.
Contribution margin ratio
CM ratio = CM ÷ Price
The contribution share of every revenue dollar.
Break-even units
BE units = Fixed costs ÷ CM
Round up when fractional sales aren't possible.
Break-even revenue
BE revenue = BE units × Price = Fixed ÷ CM ratio
The same point in sales dollars.
Target-profit units
Units = (Fixed + Target profit) ÷ CM
Break-even plus the volume the target needs.
Expected profit
Profit = Expected units × CM − Fixed
Negative below break-even.
Margin of safety
MoS % = (Expected − BE units) ÷ Expected
The demand cushion before losses.
Required price
Price = VC + (Fixed + Target) ÷ Expected units
When volume can't move, price must.
Max variable cost
Max VC = Price − (Fixed + Target) ÷ Units
The cost ceiling your goal allows.
Max fixed costs
Max fixed = Units × CM − Target
The heaviest overhead the plan can carry.
Weighted multi-product CM
wCM = Σ (CMᵢ × mixᵢ)
mixᵢ = each product's share of units sold. Portfolio BE = fixed ÷ weighted CM.
Startup payback
Payback units = Startup cost ÷ CM
One-time costs as a volume, not monthly overhead.
Fixed costs vs variable costs
Fixed costs stay roughly the same regardless of how much you sell within the period: rent and leases, salaries and payroll, insurance, software subscriptions, utilities, loan payments, base marketing spend, admin and accounting. Variable costs rise with each unit sold: raw materials and COGS, packaging, shipping and delivery, payment processing fees, marketplace and platform fees, sales commissions, direct labour per unit, and refund or warranty allowances.
Sorting expenses correctly is what makes the analysis trustworthy. The classic test: if you sold one more unit tomorrow, would this cost grow? If yes, it is variable and belongs in the contribution margin; if no, it is fixed and belongs in the numerator. Misclassifying a per-sale fee as overhead (or vice versa) distorts both the margin and the break-even point.
Some costs are stepped rather than purely fixed — a second employee, a bigger warehouse. Treat them as fixed within the volume range you are analysing, and re-run the numbers when crossing the step.
Contribution margin explained
Contribution margin is the engine of break-even analysis. Every formula on this page is a different question asked of the same number: how much does one sale contribute after its own costs are paid? Fixed costs divided by that contribution is break-even; fixed costs plus a target divided by it is your profit plan; expected volume times it minus fixed costs is your expected profit.
The bigger the gap between price and variable cost, the fewer units you need — and small changes move it disproportionately. In the worked example below, a 10% price increase lifts the contribution margin from $45 to $53 and cuts break-even from 400 to 340 units, while a 10% variable-cost cut only reaches $48.50 and 372 units. That asymmetry is why the scenario section names the most effective lever for your numbers.
One caution: contribution margin is not gross margin. Gross margin typically subtracts only COGS; contribution margin subtracts everything that scales with a sale — fees, commissions, shipping, refund allowances. For break-even, the contribution view is the honest one.
Break-even example
A product business has $18,000 per month of fixed costs, sells at $80, and pays $35 of variable cost per unit.
Contribution margin = 80 − 35 = $45 per unit (a 56.25% contribution margin ratio).
Break-even units = 18,000 ÷ 45 = 400 units.
Break-even revenue = 400 × 80 = $32,000.
For a $5,000 monthly profit target: (18,000 + 5,000) ÷ 45 = 511.1 → 512 units in practice.
At an expected volume of 500 units: profit = 500 × 45 − 18,000 = $4,500, and the margin of safety is (500 − 400) ÷ 500 = 20%.
The reading: the plan is profitable at expected volume but lands just short of the $5,000 target (a $500 gap — about 12 more units), and sales can fall 20% before the month turns loss-making. The calculator loads these numbers by default so you can poke at them.
What to do if break-even is too high
If break-even sits above realistic demand, something in the structure has to move. The levers, roughly in order of leverage:
Raise the price carefully. The whole increase lands in the contribution margin, so it cuts break-even fastest — but only if demand holds. Test it against a realistic volume drop, not a hopeful one.
Reduce variable costs. Supplier negotiations, packaging, shipping rates, and per-sale fees compound on every unit. The Solve For mode tells you the maximum variable cost your plan can carry.
Reduce fixed costs. Each contribution margin's worth of overhead removed ($45 in the example) cuts break-even by one full unit — and every dollar removed lowers the break-even revenue bar by more than a dollar (1 ÷ CM ratio, about $1.78 here). The max-fixed-cost figure shows the heaviest base your expected volume can support.
Improve volume honestly. Volume helps only when the contribution margin is positive — more sales of a margin-negative product dig the hole faster.
Change the sales mix. In multi-product businesses, shifting mix toward higher-margin items lowers the weighted break-even without touching any single price.
Avoid cutting price without demand proof. A price cut raises break-even sharply; it only pays if volume grows more than proportionally — which is a demand claim, not an arithmetic one.
Common break-even mistakes
1. Ignoring payment and platform fees
A 2.9% gateway fee and a 10% marketplace commission are variable costs. Leaving them out understates variable cost and makes break-even look easier than it is — the Ecommerce mode includes them by default.
2. Confusing gross margin with contribution margin
Contribution margin subtracts ALL costs that vary with a sale — including fees, commissions, and shipping — not just COGS. Using gross margin overstates the contribution each sale makes.
3. Treating one-time startup costs as monthly fixed costs
A $9,000 setup cost is not $9,000 of monthly overhead. Enter it as a startup cost and read the payback volume instead — mixing it into fixed costs inflates break-even forever.
4. Ignoring refunds and returns
If 3% of revenue comes back as refunds, your effective revenue per order is lower. Build an allowance into the variable cost (the Ecommerce mode has a field for it).
5. Ignoring capacity limits
A service business that needs 60 billable hours a week to break even does not have a pricing problem — it has an impossible plan. Check required volume against deliverable capacity.
6. Assuming all units sell at one price
Discounts, bundles, and tiered pricing bend the revenue line. Use a realistic average price, or the Multi-Product mode with a sales mix.
7. Ignoring taxes and working capital
Break-even here is an operating calculation before tax and financing. Profit at break-even does not mean cash in the bank — inventory and receivables consume cash first.
8. Using break-even as a cash-flow forecast
Break-even is a profit-mechanics snapshot. Payment timing, inventory purchases, and loan repayments mean a profitable month can still be cash-negative.
Limitations and assumptions
This is an educational planning estimate built on standard cost-volume-profit assumptions (as formalised in the ACCA reference below).
It assumes constant prices and costs across the volume range — discounts, bulk pricing, and rising input costs bend the real curve.
It does not replace accounting advice, and does not fully model taxes, depreciation, financing, working capital, seasonality, inventory timing, or demand elasticity.
Multi-product results depend heavily on the sales-mix assumption holding at every volume.
Break-even profit does not always mean positive cash flow — payment timing and inventory purchases move cash separately.
The sales volume (or revenue) where total revenue equals total fixed plus variable costs. Below it the business loses money; above it, each sale adds roughly the contribution margin per unit to profit.
What is contribution margin?
Selling price minus variable cost per unit — the amount each sale contributes toward fixed costs and profit. The contribution margin ratio divides it by the price. It is the engine of every number on this page.
What is the difference between break-even units and break-even revenue?
Units is the volume to sell (fixed costs ÷ contribution margin per unit); revenue is the same point in sales dollars (units × price, or fixed costs ÷ contribution margin ratio). Use units for capacity planning and revenue for sales targets.
Can break-even be impossible?
Yes — when variable cost per unit equals or exceeds the selling price, the contribution margin is zero or negative, every sale loses money before fixed costs, and no volume breaks even. The calculator shows “Not possible” instead of a misleading number.
What is margin of safety?
The cushion between expected sales and break-even: (expected − break-even) ÷ expected. Under 10% is a very thin buffer, 10–25% moderate, above 25% healthier. It answers “how much can demand disappoint before we lose money?”
Should I include my own salary in fixed costs?
If you need to pay yourself for the business to be sustainable, yes — include the salary you actually need as a fixed cost. Leaving it out makes break-even look easier by pricing your time at zero.
Should startup costs be included?
Keep one-time startup costs separate from period fixed costs. This calculator takes them as a separate input and reports a payback volume — how many sales recover the initial outlay — instead of inflating monthly break-even.
How does price affect break-even?
A higher price raises the contribution margin and lowers break-even volume — often dramatically, because the whole increase lands in the margin. But demand may fall at a higher price (elasticity), which this model does not predict; test scenarios instead.
How do refunds affect break-even?
Refunds reduce effective revenue per order. Model them as a variable-cost allowance (a % of price): a 3% refund rate on a $60 order adds $1.80 of per-order cost, shrinking the contribution margin and raising break-even.
How do I calculate break-even for a service business?
Replace units with clients, projects, or billable hours: contribution margin = average fee − direct delivery cost, break-even = fixed overhead ÷ that margin. The Service mode does this and warns when the required volume looks beyond realistic capacity.
How do I calculate break-even for ecommerce?
Build the true per-order variable cost first: product + packaging + shipping subsidy + ad cost per order + payment and platform percentages + a refund allowance. The Ecommerce mode computes that contribution margin, the break-even order count, and warns when CAC consumes the margin.
How do I calculate break-even for multiple products?
Use a weighted-average contribution margin: weight each product's price and variable cost by its sales-mix share, then divide fixed costs by the weighted margin. The Multi-Product mode handles up to 10 products and warns when the mix doesn't total 100% or low-margin items dominate.
Does this include tax?
No. Break-even here is an operating calculation before income tax and financing effects. Tax applies to profit after break-even, and sales tax/VAT collected from customers is normally a pass-through, not revenue.
Is break-even the same as cash-flow positive?
No. Break-even is about profit mechanics; cash flow is about timing. Inventory purchases, customer payment delays, loan principal, and tax instalments can leave a profitable business short of cash. Treat break-even as one lens, not a cash forecast.
How many units for a target profit?
Target-profit units = (Fixed costs + Target profit) ÷ Contribution margin per unit. With $18,000 fixed, a $45 contribution margin, and a $5,000 target: 23,000 ÷ 45 = 511.1 — 512 units in practice, since you round up when fractional sales aren’t possible.
Related calculators
Break-even answers “how much must I sell?” — these tools take the next questions:
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Sources & methodology
The calculator applies the standard cost-volume-profit identities — contribution margin = price − variable cost, break-even units = fixed costs ÷ contribution margin, break-even revenue = fixed costs ÷ contribution margin ratio, target-profit units = (fixed + target) ÷ contribution margin, margin of safety = (expected − break-even) ÷ expected — as published in the references below, including ACCA's statement of the constant-price/constant-cost assumptions this model inherits. Multi-product break-even uses the weighted-average contribution margin by sales mix. The exported workbook reproduces the identical formulas as live, editable Excel formulas, validated cell-by-cell against this page's engine. Calculator Matters is an independent project, not affiliated with any source listed. Links open in a new tab.
Last reviewed: 14 June 2026. Formula and assumptions reviewed for accuracy. First published 11 June 2026.
Business planning disclaimer
This break-even calculator and its XLSX workbook are for educational and business-planning purposes only. They provide estimates based on the inputs you enter and the standard cost-volume-profit assumptions (constant prices and costs, a clean fixed/variable split, sales mix held constant). They are not accounting, tax, legal, investment, or financial advice, do not model taxes, depreciation, financing, working capital, seasonality, inventory timing, or demand elasticity, and break-even profit does not always mean positive cash flow. Verify important decisions with your own records and a qualified professional.
Built and maintained by Calculator Matters, an independent calculator project. Formulas reviewed against the published sources above · Last reviewed 14 June 2026 · How we calculate · Found an error? [email protected]
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