How to use the Break-Even Calculator
- Enter your total fixed costs for the period (rent, salaries, etc.).
- Enter the selling price and the variable cost per unit.
- See the break-even units, break-even revenue and profit at your expected sales.
Break-even formula
Break-even units = Fixed costs ÷ (Price − Variable cost per unit)
The difference between price and variable cost is the contribution margin — what each sale contributes toward fixed costs. Example: fixed costs of 1,00,000, a price of 500 and a variable cost of 300 give a contribution of 200 per unit, so you break even at 500 units (2,50,000 in sales).
How to lower your break-even point
- Raise prices, if the market allows.
- Reduce variable costs through better suppliers or less waste.
- Cut or delay fixed costs such as rent and subscriptions.
Frequently asked questions
What are fixed and variable costs?
Fixed costs stay the same however much you sell (rent, salaries, software). Variable costs rise with each unit sold (materials, packaging, delivery, payment fees).
What if the price is lower than the variable cost?
Then every sale loses money and you can never break even. The calculator warns you if this happens.