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Break Even Calculator
Find the exact number of units and revenue needed to break even
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How It Works
The break-even point is where your total revenue equals total costs – you’re neither making profit nor losing money. This calculator helps you determine exactly how many units you need to sell to cover all your fixed and variable costs.
Fixed costs are expenses that stay the same regardless of production volume (rent, salaries, insurance). Variable costs change with each unit produced (materials, packaging, shipping). The contribution margin is what’s left from each sale after covering variable costs, which goes toward paying fixed costs and generating profit.
Understanding your break-even point is critical for pricing decisions, setting sales targets, and evaluating the financial viability of your business or product line.
Frequently Asked Questions
What is a break-even point?
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The break-even point is the exact number of units you need to sell (or revenue you need to generate) where your total income equals total costs. At this point, you’re not making profit, but you’re not losing money either. Any sales beyond this point generate profit.
What is contribution margin?
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Contribution margin is the amount left over from each sale after paying variable costs. It’s calculated as Price – Variable Cost. This money contributes toward covering fixed costs and generating profit. A higher contribution margin means you need to sell fewer units to break even.
Why does the calculator show an error if price equals variable cost?
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If your price per unit equals or is less than variable cost per unit, you have zero or negative contribution margin. This means you lose money on every sale and can never break even, no matter how many units you sell. You need to either raise prices or reduce variable costs.
How do I use the target profit feature?
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Enter your desired monthly profit in the optional Target Profit field. The calculator will show how many units and how much revenue you need to not only break even, but also achieve your profit goal. This treats your target profit as an additional fixed cost to cover.
Should I use monthly or annual figures?
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This calculator uses monthly figures by default, but you can use any consistent time period. Just make sure your fixed costs and target profit use the same timeframe. For annual analysis, enter annual fixed costs and annual target profit.