The owner's workbench
Break-even point calculator
Break-even is the sales level where profit is $0.00. Below it you lose money; each sale above it adds the contribution.
Your numbers
Your results
Break-even units (rounded up)
250
Break-even revenue
$25,000.00
Contribution per unit
$40.00
Contribution margin
40.0%
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Guide: Break-even point
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Estimates only. Results depend on your inputs.
Formulas
- Contribution per unit = price − variable cost per unit
- Break-even units = fixed costs ÷ contribution per unit
- Break-even revenue = break-even units × price
Worked example
Illustrative example. Numbers are made up to show the math.
Fixed costs of $12,000.00 a month, a price of $150.00 and a variable cost of $90.00 give a contribution of $60.00 per unit. Break-even is 200 units, or $30,000.00 of revenue a month.
How to use it
- Choose one period and enter fixed costs.
- Enter the price and variable cost for the same unit.
- Read contribution and break-even units; test whether capacity and demand support them.
Read the explainer
Questions owners ask
What counts as fixed vs variable cost?
Fixed costs stay about the same whatever you sell, such as rent, insurance and office pay. Variable costs rise with each sale, such as materials, job labor and card fees.
How does break-even work for a service business?
Use job hours as the unit. Price is your rate per hour, variable cost is the direct cost per hour, and the result is the billable hours you need each period.
How often should I recalculate break-even?
Whenever your price, your costs or your rent changes, and at least when you set next year's budget.
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Sources
No external research cited. Calculations and illustrative assumptions are shown above; this is not evidence of a real owner outcome.
Educational content, not tax, legal or investment advice.
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