Breakeven Calculator
Calculate your Breakeven point in units and revenue. Determine when your business will start making a profit by analyzing fixed costs, variable costs, and selling price. Essential for business planning, pricing strategies, and financial analysis.
Rent, salaries, insurance, etc.
Materials, labor, shipping, etc.
Price you charge customers
See profit or loss at a specific sales volume
Table of Contents
What is Breakeven Analysis?
Breakeven analysis is a financial calculation that determines the point at which total revenue equals total costs — the point where your business neither makes a profit nor incurs a loss. It's one of the most important tools in business planning and financial analysis.
The Breakeven point tells you:
- How many units you need to sell to cover all costs
- How much revenue you need to reach profitability
- When your business will start making a profit
- The margin of safety — how far above Breakeven you are
Understanding your Breakeven point is essential for pricing strategies, business planning, and making informed financial decisions. It helps you set realistic sales targets and understand the financial health of your business.
Breakeven Formula
The Breakeven calculation uses three key components:
Key Components
- Fixed Costs: Costs that don't change with production volume (rent, salaries, insurance, etc.)
- Variable Cost Per Unit: Costs that vary with each unit produced (materials, labor, shipping, etc.)
- Selling Price Per Unit: The price you charge customers for each unit
Formulas
Common Use Cases
- Business Planning
- Pricing Strategies
- Product Launch
- Cost Management
- Investment Decisions
- Financial Forecasting
- Loan Applications
- Scenario Analysis
How It Works
The Breakeven calculator uses your business's cost structure to determine the exact point where revenue equals costs:
- Enter Your Costs
- Enter Your Price
- Calculate Contribution Margin
- Calculate Breakeven Point
- Calculate Breakeven Revenue
The calculator also shows your contribution margin ratio — the percentage of each sale that contributes to covering fixed costs and generating profit. A higher contribution margin ratio means you need to sell fewer units to break even.
You can also test different sales volumes to see your profit or loss at specific unit levels, helping you understand the financial impact of different sales scenarios.
Frequently Asked Questions
Fixed costs are expenses that remain constant regardless of how many units you produce or sell. Variable costs are expenses that change directly with the number of units produced or sold.
Contribution margin is the amount each unit contributes to covering fixed costs and generating profit. It's calculated as: Selling Price - Variable Cost Per Unit.
If your selling price is less than your variable cost per unit, you'll lose money on every sale and never break even. You need to either increase your selling price or reduce your variable costs.
The test sales volume feature lets you see your profit or loss at a specific number of units sold. Enter the units you want to test, and the calculator shows total revenue, total costs, and profit or loss.
Contribution margin ratios vary by industry. Generally: 20-30% is low (retail), 30-50% is moderate (manufacturing), 50%+ is high (software, consulting).
Recalculate whenever your fixed costs, variable costs, or selling price change, or when planning new products or making significant business decisions.
No. All calculations happen entirely in your browser. Your financial data is never sent to our servers or stored anywhere.