Break-Even Calculator

What it measures

Understanding Break-Even

The break-even point is the sales volume at which total contribution profit exactly covers fixed costs. Each unit contributes its selling price minus its variable cost. Dividing fixed costs by that contribution per unit shows how many units are needed before the business begins generating operating profit. Because partial units usually cannot be sold, round the result up when planning a real target. Separate costs carefully: rent and base salaries are typically fixed within a relevant range, while materials, transaction fees, and per-order shipping are variable. If price is equal to or below variable cost, there is no valid break-even volume—each sale adds nothing or increases the loss. The calculation assumes price and unit cost stay constant, all produced units are sold, and the product mix does not change. Real businesses rarely behave that neatly, so use the result as a planning baseline and test conservative scenarios. It is particularly useful when launching a product, negotiating supplier costs, setting a sales target, or evaluating whether a planned discount leaves enough contribution to cover overhead.