What is the break-even point?

The break-even point is the sales volume at which total revenue equals total costs — neither a profit nor a loss is made. Sales above this point generate profit; sales below result in a loss.

What are fixed costs vs variable costs?

Fixed costs remain constant regardless of output (e.g. rent, salaries, insurance). Variable costs change in proportion to output (e.g. raw materials, packaging, sales commission).

What is contribution margin?

Contribution margin is the selling price minus the variable cost per unit. It represents how much each unit sold contributes towards covering fixed costs and generating profit.

Break-Even Calculator

Find the minimum number of units you need to sell and the revenue required to cover all fixed and variable costs. Essential for pricing and business planning.

How it's calculated

Contribution Margin = Price per unit − Variable cost per unit
Break-even units = Fixed costs ÷ Contribution margin
Break-even revenue = Break-even units × Price

Frequently Asked Questions

What is the break-even point?: The break-even point is the sales volume at which total revenue equals total costs — neither a profit nor a loss is made. Sales above this point generate profit; sales below result in a loss.
What are fixed costs vs variable costs?: Fixed costs remain constant regardless of output (e.g. rent, salaries, insurance). Variable costs change in proportion to output (e.g. raw materials, packaging, sales commission).
What is contribution margin?: Contribution margin is the selling price minus the variable cost per unit. It represents how much each unit sold contributes towards covering fixed costs and generating profit.