Break-even calculator
Find the number of units and the revenue needed to cover fixed costs and variable costs.
How it is calculated
Break-even units = fixed costs ÷ (price − variable cost per unit). Break-even revenue = break-even units × price.
Worked example
Fixed costs 50,000, price 25, variable cost 15: units = 50,000 ÷ 10 = 5,000 units, revenue = 125,000.
Steps
- Enter the fixed costs for the period (rent, salaries, insurance).
- Enter the selling price and the variable cost per unit.
- Read the break-even units and revenue.
Frequently asked questions
What counts as variable cost?
Costs that change with each unit: materials, packaging, direct labor if paid per unit, and shipping.
What if price is below variable cost?
The business loses money on each unit, and there is no break-even point. The calculator returns an error.
Does this include taxes?
No. Taxes and target profit are not included. To add profit, add the target profit to the fixed costs.
Related calculators
References
Break-even analysis from managerial accounting (Horngren, Cost Accounting; Garrison, Managerial Accounting).
Estimates for information only. Verify critical values with a qualified engineer or your supplier standards.