What is the break-even point formula?

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). Break-even sales = fixed costs ÷ contribution margin ratio.

How do I include a target profit?

Add it to fixed costs: units = (fixed costs + target profit) ÷ contribution margin per unit.

What if I sell several products?

Use a weighted average contribution margin ratio and compute break-even sales in money.

What costs are fixed and which are variable?

Fixed costs stay the same within a range of output (rent, salaries, insurance); variable costs rise with each unit (materials, packaging, commissions).

Break-Even Point Formula and Calculator

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Break-Even Point Calculator

The break-even point is the level of sales at which total revenue equals total costs, so the business makes neither a profit nor a loss. Each unit sold contributes its price minus its variable cost toward the fixed costs; the break-even point in units is the number of units whose combined contribution exactly pays for the fixed costs.

Formula

Break-even units = Fixed costs + Target profitPrice − Variable cost per unit Break-even sales = Fixed costs + Target profitContribution margin ratio

Where

Fixed costs: costs that do not change with volume (rent, salaries, insurance)
Price: selling price per unit
Variable cost per unit: costs that rise with each unit (materials, commission)
Target profit: 0 for the break-even point, or the profit you want to reach
Contribution margin ratio: (price − variable cost) ÷ price

Calculator

Fixed costs

Price per unit

Variable cost per unit

Target profit (0 for break-even)

Result and step-by-step solution

Break-even point

3,000 units

Sales of 150,000.00. Sell 3000 whole units to cover all costs.

Contribution margin per unit
50.00 − 30.00 = 20.00
Units
60,000.0020.00 = 3,000 units
Contribution margin ratio
20.0050.00 = 40%
Sales in money
60,000.000.4 = 150,000.00

How to use the formula

Dividing the fixed costs by the contribution margin ratio instead of the per-unit margin gives the break-even point in sales value, which is handy for businesses that sell many products. Add a target profit to the fixed costs and the same formula tells you how many units you need to sell to earn it; leave it at zero for the break-even point itself.

With fixed costs of 60,000, a price of 50 and a variable cost of 30, each unit contributes 20, so the business breaks even at 3,000 units, or 150,000 of sales. To earn 20,000 of profit it would need 4,000 units. The price must be above the variable cost, otherwise every sale deepens the loss. For contribution figures on their own, see the contribution margin formula; the site’s small business break-even calculator offers a quick alternative.

Frequently asked questions

What is the break-even point formula?: Break-even units = fixed costs ÷ (price per unit − variable cost per unit). Break-even sales = fixed costs ÷ contribution margin ratio.
How do I include a target profit?: Add it to fixed costs: units = (fixed costs + target profit) ÷ contribution margin per unit.
What if I sell several products?: Use a weighted average contribution margin ratio and compute break-even sales in money.
What costs are fixed and which are variable?: Fixed costs stay the same within a range of output (rent, salaries, insurance); variable costs rise with each unit (materials, packaging, commissions).

Last reviewed: September 26, 2026. Calculations run in your browser and were checked against numpy-financial, SciPy and published spreadsheet examples.