What it does
The break-even point is the number of sales where you have covered all your costs and start to make a profit. Below it you lose money; above it, every extra sale adds to profit. Small businesses, market stalls, freelancers and side projects can all use it to test a price before they start.
You give it your fixed costs (what you pay however much you sell), your selling price and the variable cost of each unit. It gives the units and sales you need, and how many for a profit target. To work out discounts and margins, use the percentage calculator; to compare the price per unit of supplies, the unit price tool.
How to use it
- Enter Fixed costs for the period, such as a month: rent, wages, software.
- Enter the Selling price and the Variable cost per unit (materials, packaging, card fees).
- Optionally enter a Profit you want.
- Read the break-even units and sales, then use If the price changes to try a higher or lower price.
What each setting does
- Profit per unit (contribution margin): price minus variable cost. It is what each sale contributes to fixed costs.
- Units for your target: (fixed costs + profit) divided by profit per unit, rounded up.
- Price change: shows how raising or cutting the price moves the break-even point.
Worked example
Fixed costs are 10,000, the price is 50 and each unit costs 30 to make. Each sale leaves 20, so you need 10,000 / 20 = 500 units, which is 25,000 in sales. To make 5,000 profit you need 750 units. Raise the price by 10% to 55 and each sale leaves 25, so you break even at 400 units.
FAQs
What if my costs are mixed? Put costs that do not change with sales in fixed costs, and costs per sale in variable cost.
Why must the price beat the variable cost? Otherwise every sale loses money and more sales make things worse.
Are the results exact? They assume steady prices and costs. Use them as a guide, and test a cautious case. Not financial advice.
Where the numbers come from
- Standard break-even formula: break-even units = fixed costs / (price - variable cost per unit). Plain arithmetic.
Standard scientific values, such as constants, atomic weights and melting points, are facts found in every textbook; we name where ours were checked. If you are an author or publisher and want a value, a credit or a table changed or removed, tell us and we will act quickly.
Last updated 2026-11-10.