Break-Even Point Calculator (in Units)
Find out exactly how many units you need to sell to cover your costs and start making a profit.
Your Business Costs
Break-Even Point
334
units to sell
Contribution Margin: $30.00 per unit.
This is the amount from each sale that contributes to covering fixed costs and generating profit.
What is the Break-Even Point?
The break-even point (BEP) is a fundamental concept in business and economics. It represents the exact point at which a company's total costs and total revenues are equal. In other words, it's the level of production at which the business is neither making a profit nor suffering a loss. Reaching this point is the first major milestone for any new product or venture.
The Core Components
- Fixed Costs: These are expenses that do not change with the number of units produced or sold. Examples include rent, salaries, insurance, and equipment leases.
- Variable Costs: These costs are directly tied to the production of each unit. Examples include raw materials, direct labor, and packaging.
- Sale Price Per Unit: The amount you sell one unit of your product for.
The Break-Even Formula
The calculation is straightforward and powerful. It hinges on the "Contribution Margin" – the profit made on each unit sold before accounting for fixed costs.
Break-Even Units = Total Fixed Costs / (Sale Price Per Unit - Variable Cost Per Unit)
The denominator (Price - Variable Cost) is the Contribution Margin.
Why This Matters for Your Business
Pricing Strategy
Helps you set realistic prices. If your break-even point is too high, you may need to increase your price or find ways to lower costs.
Goal Setting
Provides a clear, tangible sales target for your team. It's the first finish line to cross.
Viability Analysis
Before launching a new product, you can determine if the idea is financially viable. If the required number of units is unrealistic, you can pivot before investing too much capital.
Managing Costs
Shows the direct impact of cost changes. See how a small reduction in variable costs or fixed expenses can significantly lower your break-even point.
Beyond Break-Even: Once you sell more than the break-even number of units, every additional sale contributes directly to your profit, based on the contribution margin per unit.