Break-Even Made Simple
A concise walkthrough with examples, pitfalls, and the matching calculator.
Estimated reading time: 3–4 minutes
What it does
The break-even calculator tells how many units you must sell before revenue covers fixed and variable costs. After that point each sale adds margin. It uses fixed costs divided by contribution per unit (price minus variable cost) to find the threshold.
How to use it
Enter three numbers; result appears instantly.
- Fixed Costs (rent, salaries, etc.)
- Variable Cost per Unit (materials, fees)
- Price per Unit
- Example: 5000 fixed, 20 variable, 50 price → about 167 units.
When to use it
Use it to test pricing, cost cuts, or new product ideas before committing. Helpful when deciding if planned volume can cover startup spend.
Interpreting results
Lower break-even means less risk; reach it sooner or adjust assumptions. If price is at or below variable cost you cannot break even—raise price or reduce cost.
Related Guides
Continue learning with ROI vs Annualized ROI and dive into loan affordability in Mortgage Payment Breakdown. You can also explore every tool on the calculator dashboard.