Break-Even Calculator
Estimate break-even units and sales revenue needed before profit begins with a free calculator, clear formula notes, practical examples, common mistakes, FAQs and related finance calculators.
On this page
Break-even: inputs and result
Enter fixed costs, selling price per unit and variable cost per unit. The result is the number of whole units needed to cover the entered fixed costs, using one selling price and one unit cost.
How the calculation works
Each sale contributes selling price minus variable cost towards fixed costs. The calculator divides fixed costs by that contribution and rounds up to a whole unit. Revenue is the rounded unit count multiplied by the selling price.
Formula and assumptions
Contribution per unit = price − variable cost. Break-even units = ceiling(fixed costs ÷ contribution), when contribution is positive. With zero fixed costs and a positive contribution, the result is zero units. If contribution is zero or negative, no finite number of sales covers positive fixed costs.
Using the fields
- Choose one accounting period for the fixed costs.
- Enter the selling price and variable cost for the same unit, using a consistent GST basis.
- Calculate and compare the required unit count with plausible sales in that period.
Worked examples
Positive contribution
Fixed costs of $2, 000, price $50 and variable cost $25 give a $25 contribution. $2, 000 ÷ $25 = 80 units; revenue at that point is 80 × $50 = $4, 000.
Rounding up
At a $24 contribution, $2, 000 ÷ $24 = 83.33, so 84 whole units are required. At 83 units, contribution is only $1, 992.
A loss on each sale
A $20 selling price with $25 variable cost loses $5 per unit. Increasing sales cannot cover $2, 000 of fixed costs under those assumptions.
Reading the result
The result covers only the costs entered. It is a volume threshold, not a sales forecast or a cash-flow schedule. Mixed product margins need a separate weighted contribution model.
Common mistakes
- Mixing monthly fixed costs with annual sales.
- Omitting per-order payment, packaging or fulfilment costs.
- Treating a non-positive contribution as a zero-unit break-even result.
- Mixing GST-inclusive revenue with GST-exclusive costs.
What is included
This model assumes the unit price and variable cost stay constant. It excludes capacity limits, stock timing, tax, financing and any overhead not entered as a fixed cost.
Supporting guides for this calculator
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Frequently asked questions
Why are units rounded up?
A fraction of a sale cannot cover the remaining fixed cost when products are sold as whole units.
What if variable cost is higher than price?
Each additional sale makes a loss. There is no finite break-even volume for positive fixed costs until price or unit costs change.
Is break-even revenue the same as profit?
No. It is sales revenue at the calculated cost-covering volume. Net profit also depends on every cost included or omitted from the model.
Using this calculation
Check the contribution before the unit count. If it is positive, round the required sales up and compare that volume with demand and capacity for the same period.