How to Use This Break-even Calculator
Enter your fixed costs (rent, salaries, insurance), the price you charge per unit, and the variable cost to produce each unit. The calculator shows how many units you must sell to cover all costs. Use the profit projection section to see your expected profit or loss at any sales volume.
Understanding Break-even Analysis
The break-even point is where total revenue equals total costs—you're neither making nor losing money. Below this point you operate at a loss; above it, every additional unit sold contributes directly to profit. This is one of the most fundamental concepts in business planning.
Contribution Margin
The contribution margin is the difference between the selling price and variable cost per unit. It represents how much each unit "contributes" toward covering fixed costs and generating profit. A higher contribution margin means you reach break-even faster and earn more per unit after that point.
When to Use Break-even Analysis
Use this calculator when launching a new product, evaluating pricing strategies, deciding whether to invest in cost-reducing equipment, or preparing a business plan. It helps answer the key question: "How much do I need to sell to make this viable?"