What is contribution margin?
It is price per unit minus variable cost per unit.
Finance
Break-even Calculator
Enter your fixed costs, selling price, and cost per unit to find out the exact number of sales needed to break even.
Live calculator output
Enter costs and pricing to estimate break-even units.
How it works
The break-even point is where total revenue equals total costs. The formula is: Break-even Units = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit).
The denominator is called the contribution margin — it represents how much each sale contributes toward covering fixed costs. Once you sell enough units to cover all fixed costs, every additional sale generates profit.
Practical example
A small business has 15,000 in monthly fixed costs. They sell a product for 45 with a variable cost of 18 per unit. Contribution margin = 45 − 18 = 27. Break-even = 15,000 ÷ 27 = 556 units per month.
Selling 600 units generates 600 × 27 − 15,000 = 1,200 in profit. Each unit above break-even adds exactly 27 to the bottom line.
Frequently asked questions
What if margin is zero or negative?
Break-even is not achievable under those assumptions.
Does this estimate profit after break-even?
No. It only estimates the sales volume needed to cover fixed and variable costs.
Can I use this for services instead of products?
Yes. Treat your hourly rate or project fee as the price per unit, and your time or resource cost as the variable cost.
What counts as a fixed cost?
Rent, salaries, insurance, software subscriptions, and any cost that stays the same regardless of how many units you sell.
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