Result
- Break-even revenue$10,633.00
- Per-unit contribution margin$37.00
- Contribution margin %75.5%
- Total variable costs at break-even$2,604.00
- Per-day equivalent (30-day month)7.2 units
How to use this calculator
- Add up all your monthly fixed costs (rent, salaries, software, insurance — anything that doesn't change with sales volume).
- Enter the price you charge per unit (or per subscriber for SaaS).
- Type the variable cost per unit (materials, payment processing, hosting per user).
About this tool
The break-even number is the most basic question in business: how many units do you need to sell each month to cover your fixed costs? Subtract variable cost from price to get your contribution margin (the dollars per sale that go toward fixed overhead and profit). Divide your monthly fixed costs by that margin and you have the break-even number — sales above this turn into actual profit. If your margin is zero or negative, you can't break even — fix that before scaling.
How it works — the formula
Break-even units = Fixed costs / (Price − Variable cost)
Break-even revenue = Break-even units × Price
Contribution margin % = (Price − Variable cost) / PriceBreak-even analysis comes from cost-volume-profit (CVP) accounting: the level of unit sales at which total revenue exactly covers the sum of fixed and variable costs, leaving zero profit. The contribution margin per unit (price minus variable cost) measures how much each sale contributes toward covering fixed costs. Once cumulative contribution margin equals fixed costs, every additional sale becomes profit.
Worked examples
- Inputs:
- Fixed = $20,000/mo, Price = $50/mo subscription, Variable = $5/mo (hosting)
- Output:
- Break-even ≈ 445 paying customers; contribution margin = 90%
- Inputs:
- Fixed = $100,000 setup, Price = $40/unit, Variable = $25/unit
- Output:
- Break-even ≈ 6,667 units sold; contribution margin = 37.5%
- Inputs:
- Price = $20, Variable = $25
- Output:
- Contribution margin = −$5; no quantity of sales reaches break-even — pricing or cost structure must change first
Limitations
- Assumes a constant sale price — discounts, volume tiers, and price wars all shift the line.
- Assumes variable cost per unit is truly proportional — bulk discounts, capacity steps, and overtime push real curves non-linear.
- Fixed vs variable is a simplification; many costs are mixed (semi-variable) and need decomposition.
- Ignores time value of money — for capital projects, pair with NPV or IRR analysis.
Break-even analysis is a planning tool, not a guarantee of profitability. This calculator does not provide accounting or business advice — consult a CPA or business advisor for decision-grade modeling.