Product Break-Even Calculator
Calculate break-even units from fixed costs, variable cost, and price.
Returns break-even volume, break-even revenue, and contribution margin per unit.
The break-even point tells you exactly how many units you must sell before your business stops losing money and starts generating profit. It is one of the most important formulas in business planning.
Break-Even Units Formula:
BEU = Fixed Costs / (Selling Price Per Unit − Variable Cost Per Unit)
The denominator is the Contribution Margin Per Unit (CM):
CM = Selling Price − Variable Cost
Break-Even Revenue (in dollars):
BER = Fixed Costs / Contribution Margin Ratio
CM Ratio = CM / Selling Price
Worked Example — Handmade candle business:
- Monthly fixed costs: rent $800 + utilities $150 + insurance $100 = $1,050
- Selling price per candle: $18
- Variable cost per candle: wax $3 + wick $0.50 + jar $2 + label $0.25 = $5.75
- CM per unit = $18 − $5.75 = $12.25
- BEU = $1,050 / $12.25 = 85.7 → 86 candles/month
- CM Ratio = $12.25 / $18 = 68.1%
- BER = $1,050 / 0.681 = $1,542/month
At 86 candles, you cover all costs exactly. Candle 87 onward = pure $12.25 profit.
Profit at 150 candles/month: Profit = (150 − 86) × $12.25 = 64 × $12.25 = $784/month
Key Insight: Lowering variable costs raises CM and lowers the break-even point. Bulk material purchases, for example, often yield the fastest path to profitability.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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