Break-Even Point Calculator (Fixed & Variable Costs)
Free calculator that finds your break-even revenue, break-even unit sales, and margin of safety from your fixed costs and variable costs (either a variable cost ratio, or unit price and variable cost per unit).
What is break-even point calculation?
This break-even point calculator finds the exact revenue and unit sales at which your profit is zero, using only your fixed costs and variable costs (either a variable cost ratio, or a unit price and variable cost per unit). It is a core concept in managerial accounting and small-business finance, useful for setting sales targets and testing pricing decisions.
Use the "from unit price & variable cost" mode when you know your per-unit price and cost, or the "from variable cost ratio" mode when you only know variable costs as a percentage of revenue. Enter your current revenue as well to see your margin of safety — how far above break-even you currently are.
How to use
- Choose a calculation method Pick "from unit price & variable cost" if you know your per-unit figures, or "from variable cost ratio" if you only know the percentage.
- Enter your fixed costs Enter your total fixed costs for the period you are analyzing (monthly, yearly, etc.).
- Enter your variable cost details Depending on the mode, enter your unit price and variable cost per unit, or your variable cost ratio.
- (Optional) Enter your current revenue Add your current revenue to see your margin of safety.
- Read the results Your break-even revenue, break-even unit sales, and contribution margin ratio are calculated automatically.
Tips for getting more out of it
- Break-even revenue is the revenue at which profit is exactly zero. Revenue above this figure means a profit; revenue below it means a loss.
- The "from unit price & variable cost" mode also tells you the exact number of units you need to sell to break even, which is handy for setting sales targets.
- Fixed costs are expenses that stay roughly the same regardless of sales volume (rent, salaried wages, depreciation). Variable costs move in proportion to sales volume (materials, cost of goods sold, sales commissions).
- Enter your current revenue to see your margin of safety — a higher percentage means your business can absorb a bigger sales drop before turning unprofitable.
- You can lower your break-even point by cutting fixed costs or by improving your contribution margin ratio (for example by raising prices or negotiating cheaper materials).
Frequently Asked Questions
Side Note — why businesses rely on break-even analysis
Break-even analysis splits your costs into fixed costs (which stay the same regardless of how much you sell) and variable costs (which scale with sales volume), then works out the exact revenue or unit sales at which profit is zero. This approach, often called CVP analysis (Cost-Volume-Profit analysis), is a staple of introductory accounting and small-business finance courses around the world.
What makes break-even analysis genuinely useful is that it lets you simulate decisions before you make them. If you are considering a price increase, a move to more expensive premises, or a new hire, you can estimate exactly how the break-even point shifts and how much extra revenue you would need to stay profitable.
A business operating close to its break-even point can slip into a loss after even a small drop in sales, while a business with a high margin of safety can absorb much larger swings. Seasonal businesses such as restaurants and retailers benefit especially from checking whether their slow-season revenue still clears the break-even line, not just their peak-season revenue.