How are the break-even units calculated?

Divide the total fixed costs by the contribution margin per unit, where the contribution margin is the price per unit minus the variable cost per unit.

What is the contribution margin?

It is the price of one unit minus its variable cost. It is the amount each unit contributes toward covering fixed costs and, beyond break-even, toward profit.

What is the break-even revenue?

It is the break-even units multiplied by the price per unit — the sales revenue at which you exactly cover all costs.

Why must the price be greater than the variable cost?

If it is not, each unit makes a loss and fixed costs can never be covered, so there is no finite break-even point. The calculator requires a positive contribution margin.

Which currency does it use?

The currency follows the site language. The break-even math is identical in every market, and the break-even units are a plain count, not money.

Can I share a calculation?

Yes. Use Share to copy a link that reopens the calculator with the same fixed costs, price, and variable cost.

Break-even calculator

Enter your total fixed costs, the price per unit, and the variable cost per unit. The calculator shows the break-even units, the revenue at that point, and the contribution margin per unit as you type.

Use it to find how many units you must sell to break even, the revenue that represents, and the contribution margin earned on each unit.

Break-even units

500

Variable cost Contribution margin

Break-even revenue: $25,000.00
Contribution margin / unit: $20.00

The result updates as you type. The bar splits the price of one unit into the variable cost and the contribution margin that goes toward covering fixed costs.

How does it work?

The price must be greater than the variable cost so the contribution margin (P − V) is positive and the break-even point is finite. You supply the costs and price yourself.

Break-even formula

Q = \frac{F}{P - V}

Q: Break-even units (quantity to sell).
F: Total fixed costs.
P: Selling price per unit.
V: Variable cost per unit.

Fixed costs of 10,000 with a price of 50 and a variable cost of 20 per unit give a break-even of 500 units, or 25,000 in revenue.

Method & sources

Costs are linear: fixed costs stay flat and the variable cost per unit is the same at every volume. A single product or a stable average is assumed; there is no product mix. The price per unit must be greater than the variable cost per unit so the contribution margin is positive.

Sources

Where this method comes from — use these references to understand the formula, assumptions, and limits.

Break-even analysis — SBA — U.S. Small Business Administration, verified 2026-06-10

How we calculate

Costs are linear: fixed costs stay flat and the variable cost per unit is the same at every volume.
A single product or a stable average is assumed; there is no product mix.
The price per unit must be greater than the variable cost per unit so the contribution margin is positive.
The currency shown follows the site language; the break-even math is the same in every market.
Taxes, seasonality, discounts, and step changes in capacity are not included.

Rounding

Break-even units are rounded to a whole number and revenue to two decimals for display. The calculation uses full precision.

What this calculator does

The break-even point is the sales volume at which total revenue exactly covers total costs, so profit is zero. Each unit you sell earns a contribution margin — its price minus its variable cost — and that margin chips away at the fixed costs. This calculator divides the fixed costs by the contribution margin to find the break-even units, then shows the revenue at that point and the margin per unit.

How to use it

Enter the total fixed costs.
Enter the selling price per unit.
Enter the variable cost per unit.
Read the break-even units, break-even revenue, and contribution margin below.

A worked example

With fixed costs of 10,000, a price of 50, and a variable cost of 30 per unit, the contribution margin is 20. Dividing 10,000 by 20 gives a break-even of 500 units, which is 25,000 in revenue.

Why the price must exceed the variable cost

If the price is not greater than the variable cost, every unit loses money and you can never cover the fixed costs, so there is no finite break-even point. The calculator requires a positive contribution margin for this reason.

Common mistakes

Putting variable costs in the fixed-costs box. Fixed costs do not change with volume; variable costs do.
Using a price below the variable cost, which has no break-even point.
Forgetting that taxes, discounts, and seasonality are not part of this simple model.

When it's useful

Pricing a new product, sizing a launch, or any quick check of how many units a fixed-cost commitment requires you to sell.

FAQ

How are the break-even units calculated?: Divide the total fixed costs by the contribution margin per unit, where the contribution margin is the price per unit minus the variable cost per unit.
What is the contribution margin?: It is the price of one unit minus its variable cost. It is the amount each unit contributes toward covering fixed costs and, beyond break-even, toward profit.
What is the break-even revenue?: It is the break-even units multiplied by the price per unit — the sales revenue at which you exactly cover all costs.
Why must the price be greater than the variable cost?: If it is not, each unit makes a loss and fixed costs can never be covered, so there is no finite break-even point. The calculator requires a positive contribution margin.
Which currency does it use?: The currency follows the site language. The break-even math is identical in every market, and the break-even units are a plain count, not money.
Can I share a calculation?: Yes. Use Share to copy a link that reopens the calculator with the same fixed costs, price, and variable cost.

Related calculators

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