Business Break-Even Calculator

How it works

Separate fixed costs from variable costs for the same period

Fixed costs are costs you expect to incur for the planning period regardless of the number of units sold within the modeled range. Variable costs rise with each additional unit. Enter monthly figures consistently: a monthly fixed-cost total should be compared with monthly sales and a monthly profit target. Convert an annual expense to a monthly average before including it, rather than mixing periods.

The selling price and variable cost must describe the same unit. For a product, variable costs might include production, packaging, fulfillment, and per-sale charges. For a service, the unit might be an hour or a completed appointment. If a cost has a fixed component and a per-unit component, separate them between the two inputs. The model does not automatically account for capacity limits or changing supplier prices.

Break-even example with 3,000 of fixed costs

Assume monthly fixed costs of 3,000, a selling price of 50 per unit, and variable costs of 20 per unit. Each sale contributes 30 toward fixed costs and profit. Break-even is 3,000 ÷ 30 = 100 units, equivalent to 5,000 in sales revenue. At 100 units, revenue and total cost are equal; the business has not yet earned an operating profit.

For a monthly profit target of 1,000, the required volume is (3,000 + 1,000) ÷ 30 = 133.33 units. Selling whole units means the target is 134. If planned sales are 150 units, modeled profit is 150 × 30 − 3,000 = 1,500. The margin of safety is (150 − 100) ÷ 150, or approximately 33.33% of planned unit sales.

Use the contribution margin to compare business choices

Contribution per unit is the money left from a sale after its variable cost. Contribution margin expresses that amount as a percentage of the selling price. It differs from the final operating profit margin because fixed costs still need to be paid. A positive contribution can coexist with a monthly loss when the number of sales is too small to cover fixed costs.

Use saved scenarios to test a price change, a supplier-cost increase, or a different fixed-cost structure. Keep the other assumptions unchanged to understand the effect of each adjustment. Raising the selling price improves the arithmetic contribution, but this calculator does not predict how customers will respond or how sales volume might change. Planned units are an input, not a demand forecast.

Understand unattainable targets and fractional thresholds

If selling price is equal to variable cost, each sale contributes nothing toward positive fixed costs. If price is lower than variable cost, every additional sale increases the loss. The calculator reports that a positive-contribution break-even target is unavailable in those cases, rather than producing a misleading negative sales target. With no fixed costs, selling zero units can still produce zero operating profit.

The sales-revenue threshold uses the exact fractional break-even quantity. The whole-unit target rounds up because many products cannot be sold in fractional units. A negative margin of safety means planned sales are below the threshold. The model covers one product with a constant cost structure; a changing product mix, step costs, interest, or income tax needs additional analysis or explicit cost inputs.

Break-even & target profit: formula and assumptions

Contribution per unit = price − variable cost. Break-even units = fixed costs ÷ contribution. Target-profit units = (fixed costs + target profit) ÷ contribution.

Whole-unit targets round up. Fixed costs, profit target, and planned sales must cover the same period. This is a single-product model with constant unit economics; a zero or negative contribution cannot cover positive fixed costs through more sales.

Worked example

Reference example currency: USD. These fixed examples do not change with your calculator preferences.

Using the Break-even & target profit example:

Fixed costs per month ($)

3000

Selling price per unit ($)

50

Variable cost per unit ($)

20

Target monthly operating profit ($)

1000

Planned monthly unit sales (units)

150

Contribution per unit = price − variable cost. Break-even units = fixed costs ÷ contribution. Target-profit units = (fixed costs + target profit) ÷ contribution.

Example result

• Break-even sales revenue uses the fractional threshold; whole-unit targets round up. A negative margin of safety means planned sales fall below break-even.

These are illustrative inputs. Change the values to explore a different scenario.

What to keep in mind

Use one currency throughout. Currency selection changes labels, not exchange rates. Calculate, then save a named scenario in My workspace to keep it in this browser; export a workspace backup to move it to another device.

Formula references

• SBA: break-even point and contribution margin (opens in a new tab)

References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.

Common questions