Appearance

Break-Even Calculator

By Calxy · Updated · Calculation methodology

Find the whole units and revenue needed to cover fixed costs, or the units for a target profit, from selling price and variable cost per unit.

Printed from Calxy · https://www.calxy.net/financial/break-even-calculator

Whole units needed to break even250
currency units

0 – 1,000,000,000,000 currency units

currency units

0 – 1,000,000,000,000 currency units

currency units

0 – 1,000,000,000,000 currency units

Whole units needed to break even

250

  • Unrounded break-even quantity250.0000
  • Revenue at whole-unit quantity12,500.0000 currency units
  • Break-even revenue (unrounded)12,500.0000 currency units
  • Contribution per unit20.0000 currency units
  • Contribution margin ratio40.00%

Assumes constant prices and costs, all produced units sold, and one product or a constant sales mix. Target profit is before income tax.

How this was calculated

  1. Contribution per unit = selling price − variable costPut in your numbers: Contribution = 50.00 − 30.00Answer: 20.00 currency units
  2. Break-even units = fixed costs ÷ contribution per unitPut in your numbers: Units = 5,000.00 ÷ 20.00Answer: 250 units
  3. Round up to whole unitsPut in your numbers: ⌈250⌉Answer: 250 units
  4. Contribution margin ratio = contribution ÷ selling pricePut in your numbers: 20.00 ÷ 50.00Answer: 40%
  5. Revenue needed = (fixed costs + target profit) ÷ contribution margin ratioPut in your numbers: (5,000.00 + 0.00) ÷ 0.4Answer: 12,500.00 currency units

Formula and method

Contribution per unit = selling price − variable cost. Break-even quantity = fixed costs ÷ contribution, rounded up.

Worked example

With fixed costs of 5,000, price 50 and variable cost 30, each unit contributes 20. Break-even is 250 units and 12,500 in revenue.

Units for a target profit

Units = (fixed costs + target profit) ÷ (selling price − variable cost). Break-even revenue = fixed costs ÷ contribution margin ratio, where the ratio is contribution per unit ÷ selling price.

Using the example above with a target profit of 2,000: (5,000 + 2,000) ÷ 20 = 350 units, or 7,000 ÷ 0.40 = 17,500 of revenue.

Frequently asked questions

What if variable cost equals or exceeds price?

There is no finite profitable break-even volume under those assumptions. The calculator asks you to review price and cost rather than returning a misleading number.

References

Last updated . Results are estimates for informational purposes only.