Break-Even Point Calculator
Find the unit and revenue break-even point for your business. Enter fixed costs, selling price, and variable cost per unit to get contribution margin, break-even analysis, and margin of safety.
The break-even point is where total revenue equals total costs. The unit-based formula is: Break-even units = Fixed Costs ÷ Contribution Margin per Unit, where Contribution Margin = Selling Price − Variable Cost per Unit. The revenue-based equivalent is: Break-even revenue = Fixed Costs ÷ Contribution Margin Ratio (CMR = CM ÷ Selling Price). This is the standard CVP (Cost-Volume-Profit) model per the AICPA management accounting framework.
Margin of safety — the buffer between current sales and break-even — equals (Current Sales − Break-even Sales). IRS Pub 334 §2 distinguishes deductible fixed overhead vs. variable cost-of-goods, which maps directly to these inputs.
Worked example: Fixed costs $10,000/month. Selling price $50/unit. Variable cost $20/unit. CM = $30/unit. CMR = 60%. Break-even units = $10,000 ÷ $30 = 334 units. Break-even revenue = $10,000 ÷ 0.60 = $16,667. Selling 500 units = $25,000 revenue → margin of safety = $25,000 − $16,667 = $8,333.
How it's calculated
How to use this calculator
- Enter total fixed costs per period (monthly or annually — be consistent).
- Enter selling price per unit and variable cost per unit.
- Optionally enter target profit to calculate sales needed beyond break-even.
- Results show break-even units, break-even revenue, CM ratio, and margin of safety if you input current sales.
Formula and assumptions
CM = sellingPrice - variableCostPerUnit
CMR = CM / sellingPrice
breakevenUnits = fixedCosts / CM
breakevenRevenue = fixedCosts / CMR
= breakevenUnits × sellingPrice
targetUnits = (fixedCosts + targetProfit) / CM
marginOfSafety = actualRevenue - breakevenRevenue
marginOfSafetyPct = marginOfSafety / actualRevenue- Linear CVP
- Price and variable costs are constant at all volume levels
- Single product
- Multi-product break-even requires a weighted-average CM
- Costs classification
- Mixed costs must be separated into fixed and variable components before entry
Worked example
Coffee shop: $8,000 fixed costs, $5 variable, $12 selling price
Contribution margin vs. revenue — at three volume levels
Using the worked example above (fixed $8,000/mo, CM $7/unit), the table below shows how revenue, total contribution margin, and profit move at different volumes. This demonstrates the "operating leverage" effect — once fixed costs are covered, each additional unit falls fully to profit.
| Units sold | Revenue | Variable costs | Total CM | Profit / (Loss) |
|---|---|---|---|---|
| 800 | $9,600 | $4,000 | $5,600 | ($2,400) |
| 1,143 | $13,716 | $5,715 | $8,001 | $1 |
| 1,800 | $21,600 | $9,000 | $12,600 | $4,600 |
Operating leverage ratio = CM ÷ Operating Income. At 1,800 units: $12,600 ÷ $4,600 = 2.74× — meaning a 10% revenue increase would produce a 27.4% increase in profit.
Limitations
- Assumes constant price and variable cost — volume discounts and tiered pricing are not modeled.
- Single-product model — multi-product businesses need a weighted CM calculation.
- Does not account for step-fixed costs (costs that jump at certain volume thresholds).
- Educational estimate only — not professional business or tax advice.
Frequently asked questions
Break-even units = Fixed Costs ÷ (Price − Variable Cost). Break-even revenue = Fixed Costs ÷ CMR. Contribution margin ratio (CMR) = (Price − Variable Cost) ÷ Price. At $10,000 fixed costs, $50 price, $20 variable cost (CMR 60%): break-even is 334 units or $16,667 revenue. Margin of safety = actual sales minus break-even sales.
Recent updates
- May 2026Initial launch with unit breakeven, revenue breakeven, contribution margin ratio, and margin of safety.
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