02 Cover your costs
Break-even calculator
Enter your monthly fixed costs, your selling price and the variable cost of each unit. See how many units you need to sell each month to cover your costs.
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Your result
Enter your monthly fixed costs, selling price and variable cost per unit.
You will see
- Units to sell each month, rounded up
- The monthly sales those units bring in
- Your contribution margin per unit
Your figures stay in this browser tab. Nothing is saved or sent.
What to enter
- Monthly fixed costs
- What you pay each month whatever you sell: rent, salaries, insurance, software, loan payments. Use monthly amounts; divide a yearly bill by 12.
- Selling price per unit
- What a customer pays for one unit, product or billable hour.
- Variable cost per unit
- Costs that rise with each unit you sell: materials or the product itself, card processing fees, commissions, shipping.
- Monthly profit goal
- Optional. Profit you want left each month after covering fixed costs. Leave it blank to see break-even only.
How it is calculated
- Contribution margin per unit
- Selling price − Variable cost per unit
- Contribution margin ratio
- Contribution margin ÷ Selling price
- Break-even units
- Monthly fixed costs ÷ Contribution margin, rounded up to a whole unit
- Break-even sales
- Break-even units × Selling price
- Units for a profit goal
- (Monthly fixed costs + Profit goal) ÷ Contribution margin, rounded up
Units round up because a part-sale does not happen. The sales figure is for that whole number of units, so it can sit slightly above the exact break-even point.
The calculator uses one price and one variable cost. If you sell several products, use averages weighted by how much of each you sell.
If the variable cost per unit equals or exceeds the price, no number of sales covers your fixed costs, and the calculator says so instead of dividing.
Worked example
A shop has $6,000.00 a month in fixed costs. Each item sells for $45.00 and costs $18.00 to stock.
- Contribution margin
- $45.00 − $18.00 = $27.00 per unit
- Break-even units
- $6,000.00 ÷ $27.00 = 222.22, rounded up to 223
- Break-even sales
- 223 × $45.00 = $10,035.00
The shop needs to sell 223 items, about $10,035.00 in sales, each month before it makes a profit.
Common questions
What counts as a fixed cost?
Anything you pay on a regular schedule whether or not you make a sale: rent, salaries, insurance, subscriptions, loan payments. Costs that go up with each sale, such as materials or card fees, are variable costs.
Should I include my own pay?
If you want the business to cover a regular amount for you each month, add it to fixed costs. The result then shows the sales needed to pay you as well.
Why does it say no number of sales will break even?
When the variable cost of a unit is equal to or higher than its price, each sale adds nothing toward fixed costs. Raising the price or lowering the variable cost is the only way to get a break-even point.
Turn the numbers into a plan.
Go Big Business & Property Development helps owners with business plans and financial analysis and forecasts.