Break-Even Calculator
Calculate break-even in units and revenue from fixed costs, variable cost per unit, and price. Shows contribution margin, margin of safety, and what a price or cost change does to the break-even point.
How do I calculate the break-even point?
Divide fixed costs by the contribution margin per unit, where contribution margin is the selling price minus the variable cost per unit. If fixed costs are $200,000, price is $100, and variable cost is $60, contribution margin is $40 and break-even is 5,000 units, or $500,000 in revenue. The calculation is straightforward; the difficulty is classifying costs correctly, because most real cost lines are neither purely fixed nor purely variable.
How to use this tool
- 1
Enter fixed costs
Costs that do not change with volume over your planning horizon: rent, salaries, insurance, software.
- 2
Add price and variable cost
Selling price per unit and the cost that is incurred only when you sell one more unit.
- 3
Test the sensitivity
See break-even in units and revenue, contribution margin, and how a price or cost change moves the point.
Most costs are not cleanly fixed or variable
Break-even analysis assumes a clean split that the real chart of accounts does not provide. Four cases cause most of the error.
Step costs
Costs that are fixed until a threshold and then jump: a second warehouse, another support shift, an additional licence tier. Treating them as fixed makes break-even look achievable at a volume that would immediately trigger the step.
Semi-variable costs
A utility bill with a base charge and a usage component, or a salesperson on base plus commission. Splitting these into their fixed and variable parts is manual work that most quick analyses skip.
Multiple products
With more than one product, break-even depends on sales mix, because each product carries a different contribution margin. A single blended break-even number is only valid while the mix holds, and mix is usually the thing that changed.
Time horizon
Every cost is variable over a long enough period. Rent is fixed this quarter and negotiable in two years. Break-even is only meaningful with a stated horizon, and shortening the horizon moves more costs into the fixed bucket.
The version that reflects your business
This calculator assumes one product, one price, and a clean cost split. Your actual break-even moves with product mix, discounting, the step cost waiting at the next headcount, and seasonality in both volume and cost. Rebuilding that model each time pricing or cost structure changes is a recurring project rather than a calculation, which is why most break-even analyses are done once, at a moment that has since passed.
See how DataWyse answers thisQuestions finance teams ask about this tool
What is contribution margin?
Selling price minus variable cost per unit: the amount each additional sale contributes toward covering fixed costs and then toward profit. It is the single most useful number in break-even analysis, because it tells you what one more unit is actually worth to the business.
How do I classify a cost as fixed or variable?
Ask whether the cost changes if you sell one more unit this month. If yes, it is variable. If no, it is fixed for your planning horizon. Costs that answer 'not until we hit a threshold' are step costs and should be modelled explicitly rather than forced into either bucket.
What is margin of safety?
The gap between current or forecast sales and the break-even point, usually expressed as a percentage. A 30% margin of safety means sales could fall 30% before you start losing money. It converts break-even from a static point into a measure of how much risk the business can absorb.
How does break-even work with multiple products?
Calculate a weighted average contribution margin based on your expected sales mix, then divide fixed costs by that figure. The result is only valid while the mix holds, so recalculate whenever the mix shifts materially, which for most businesses is more often than the analysis gets redone.
Should break-even include non-cash costs?
It depends on the question. Accounting break-even includes depreciation and tells you when you stop reporting a loss. Cash break-even excludes non-cash charges and tells you when you stop consuming cash. For runway decisions, cash break-even is the one that matters.
Is this tool really free?
Yes. No signup, no email required, no usage limit. It runs entirely in your browser: nothing you type is uploaded to a server or stored anywhere. We build these because the people who find them useful are the people who eventually need a financial analyst that works the same way.
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