⚖️ Break-Even Calculator

Find out exactly how many units you need to sell — or what revenue you need to generate — to cover all your costs and start making profit.

Your Cost Structure

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MONTHLY FIXED COSTS

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Total Monthly Fixed Costs: $13,000
Break-Even Point
0 units
Break-Even Revenue
$0
Contribution Margin
$0
Contribution Margin Ratio
0%
Total Fixed Costs/mo
$0
Profit at Target Volume
$0
Margin of Safety
0 units
Margin of Safety %
0%
Profit Margin at Target
0%

Profit Table at Various Sales Volumes

Break-Even Analysis Explained

Break-Even Units = Fixed Costs ÷ Contribution Margin Per Unit
Contribution Margin = Selling Price − Variable Cost Per Unit
Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio

Key Concepts

  • Fixed Costs: Costs that don't change with sales volume — rent, salaries, insurance. You pay these whether you sell 0 or 10,000 units.
  • Variable Costs: Costs that scale directly with output — materials, shipping, sales commissions, payment processing fees.
  • Contribution Margin: What each unit sold contributes to covering fixed costs and then generating profit.
  • Margin of Safety: How far your sales can drop below target before you hit the break-even point. A higher margin of safety means lower risk.
How can I lower my break-even point? +
Three levers: (1) Increase your selling price — even a 5% price increase dramatically lowers break-even units if demand holds. (2) Reduce variable costs — negotiate supplier prices, improve production efficiency, reduce waste. (3) Cut fixed costs — move to smaller space, reduce headcount, renegotiate contracts. The most powerful move is increasing price, which also improves contribution margin.
What is a good contribution margin ratio? +
It depends heavily on the industry. Software companies often have 70–90%+ contribution margins (low variable costs). Manufacturing businesses typically see 30–50%. Service businesses vary widely. Retail often operates on 20–40%. The key is whether your total contribution covers all fixed costs and leaves profit. Compare your ratio to industry benchmarks.