Break-Even Calculator

Find the sales volume and revenue required to cover fixed and variable costs.

Math Audited
Total Fixed Costs$10,000.00
$0$100,000
Selling Price per Unit$50.00
$
$1$500
Variable Cost per Unit$30.00
$
$0$500
Break-Even Sales Volume
500 Units

Requires $25,000.00 in sales revenue to break even.

Contribution Margin$20.00
Margin Ratio (Ratio)40%
$40k$10k$00800BEP500
Revenue
Total Cost
Fixed Cost
How is this calculated?
1. Identify input variables: Fixed Costs = $10,000.00 Selling Price per Unit = $50.00 Variable Cost per Unit = $30.00 2. Compute Unit Contribution Margin: Contribution Margin = Price - Variable Cost = 50.00 - 30.00 = $20.00 3. Compute Contribution Margin Ratio: Ratio = (Contribution Margin / Price) * 100 = (20.00 / 50.00) * 100 = 40% 4. Compute Break-Even Units (rounded up): Units = ceil(Fixed Costs / Contribution Margin) = ceil(10000.00 / 20.00) = 500 5. Compute Break-Even Sales Revenue: Revenue = Units * Price = 500 * 50.00 = $25,000.00
Mathematical Audit LogVerified against standard business economics cost-volume-profit equations and GAAP principles.Last Audited: 2026-07-12
Mathematical Formulas
Contribution Margin: CM = Price - Variable Cost
Break-Even Units: BEU = ceil( Fixed Costs / CM )
Break-Even Revenue: Revenue = BEU × Price
Core Assumptions
  • Assumes unit price and unit variable cost are linear and remain constant across all sales volumes.
  • Assumes zero inventory accumulation (all units manufactured are sold immediately).
Limitations & Exclusions
  • Does not support multiple different products with separate margins or blended margins.
  • Does not account for non-linear scale pricing models or step-fixed overhead costs.

About the Break-Even Calculator

A break-even calculator is a fundamental cost-volume-profit (CVP) analysis tool designed to find the exact level of unit sales or revenue where a business covers all its fixed and variable operating costs. Breaking even means operating at zero profit and zero loss.

Mathematical Formula & Logic

Break-even point equations are modeled as follows: 1. Unit Contribution Margin: CM = Price - Variable Cost This is the profit per unit sold that goes towards covering fixed operating costs. 2. Break-Even Units (rounded up): Units = ceil(Fixed Costs / CM) Since fractional unit sales are impossible, the result is rounded up to the nearest whole integer. 3. Break-Even Sales Revenue: Revenue = Units * Price Alternatively: Fixed Costs / (CM / Price)

Step-by-Step Example

Calculate the break-even point for a business with $10,000 in fixed costs, a unit selling price of $50, and a unit variable cost of $30: 1. Identify the input variables: Fixed Costs = $10,000, Price = $50, Variable Cost = $30. 2. Compute unit contribution margin: CM = $50 - $30 = $20. 3. Compute break-even units: Units = ceil($10,000 / $20) = 500 units. 4. Compute break-even revenue: Revenue = 500 * $50 = $25,000. 5. Therefore, the business must sell 500 units ($25,000 in sales) to fully cover all operating expenses.

Reference Data & Values

fixedpricevariableunitsrevenue
$10,000$50.00$30.00500$25,000.00
$5,000$100.00$50.00100$10,000.00
$25,000$250.00$175.00334$83,500.00
$100,000$15.00$10.0020,000$300,000.00

Frequently Asked Questions

The break-even point is the level of sales where total revenues equal total costs, resulting in zero profit and zero loss for the business.
Divide total fixed costs by the unit contribution margin (Price per Unit minus Variable Cost per Unit). Round up to the nearest whole unit.
Break-even sales revenue is calculated as: Fixed Costs divided by the Contribution Margin Ratio (expressed as a decimal). Alternatively, multiply break-even units by the selling price.
Contribution margin is the selling price per unit minus the variable cost per unit. It represents the amount of money each unit sale contributes to covering fixed overheads.
If variable cost exceeds the selling price, the contribution margin is negative. This means every sale increases your losses, and the business can never break even.