Break-Even Calculator
Calculate break-even unit sales, revenue thresholds, and contribution margins for business profitability.
Last verified: September 2026Inputs & Parameters
Calculation Results
Selling price of $50.00 minus $30.00 variable cost yields $20.00 contribution margin per unit.
Break-Even Analysis & Contribution Margin
Break-even analysis identifies the exact volume of product sales or service billings where total business revenues equal total operational costs, producing zero profit and zero net loss. It establishes the baseline sales threshold required for commercial viability.
Core Mathematical Formulas
- Unit Contribution Margin:
CM = Sale Price per Unit - Variable Cost per Unit - Contribution Margin Ratio:
CM Ratio = CM / Sale Price per Unit - Break-Even Volume (Units):
Break-Even Units = Total Fixed Costs / CM - Break-Even Sales Revenue:
Break-Even Revenue = Total Fixed Costs / CM Ratio
Worked Example
A manufacturer has $45,000.00/month in fixed operational overhead (rent, salaries). Each unit sells for $120.00 and incurs $45.00 in variable direct production costs:
1. Unit Contribution Margin = $120.00 - $45.00 = $75.00/unit (62.5% CM Ratio)
2. Break-Even Units = $45,000.00 / $75.00 = 600 units
3. Break-Even Revenue = 600 × $120.00 = $72,000.00
Assumptions & Limitations
Assumes static unit sale prices and constant variable costs per unit regardless of order scale (no volume discounts). Semi-variable costs (step costs) should be partitioned into their respective fixed and variable elements.