What if the contribution margin is negative?

If your variable cost per unit is higher than your price, every sale loses money and no sales volume can ever recover fixed costs — the calculator flags this rather than showing a break-even number. You need to raise price, cut variable cost, or both before break-even is possible.

Is break-even the same as profit?

No — break-even is the point where profit is exactly zero. Below the break-even volume you are operating at a loss; above it, every additional unit contributes its full contribution margin straight to profit.

Does break-even analysis work for multiple products?

This calculator assumes a single product (or a stable sales mix treated as one). Multi-product break-even needs a weighted-average contribution margin across the mix, which is a step further than this tool covers — see the related course for that extension.

What if the contribution margin is negative?

If your variable cost per unit is higher than your price, every sale loses money and no sales volume can ever recover fixed costs — the calculator flags this rather than showing a break-even number. You need to raise price, cut variable cost, or both before break-even is possible.

Is break-even the same as profit?

No — break-even is the point where profit is exactly zero. Below the break-even volume you are operating at a loss; above it, every additional unit contributes its full contribution margin straight to profit.

Does break-even analysis work for multiple products?

This calculator assumes a single product (or a stable sales mix treated as one). Multi-product break-even needs a weighted-average contribution margin across the mix, which is a step further than this tool covers — see the related course for that extension.

Break-Even Point

Find the sales volume where profit hits zero.

The break-even calculator finds how many units you must sell before fixed costs are fully covered: break-even units = fixed costs ÷ (price − variable cost per unit).

ByHoang Truong

Fixed costs (per month)

Price per unit

Variable cost per unit

Break-even units400

Break-even revenue€10,000

Contribution margin per unit€10

Worked example

Using the numbers above:

Fixed costs (per month): €4,000
Price per unit: €25
Variable cost per unit: €15

Break-even units400

Break-even revenue€10,000

Contribution margin per unit€10

The formula

LaTeX

Q_{BE} = \dfrac{F}{P - V}

Variables

$Q_{B E}$: Break-even units (units)
$F$: Fixed costs (€)
$P$: Price per unit (€)
$V$: Variable cost per unit (€)

What break-even point means

Break-even point is the number of units you must sell before a product stops losing money and starts making a profit. Below it, your fixed costs — rent, salaries, software subscriptions, anything that doesn't change with sales volume — eat into every sale. Above it, each additional unit is pure profit (minus its own variable cost). It's the single most useful number in a first-pass business case: if the break-even volume is realistic for your market, the idea is worth building a full plan around; if it isn't, you've saved yourself months of work.

The concept sits at the center of cost-volume-profit (CVP) analysis and shows up constantly in contribution margin planning, pricing decisions, and exam questions that ask "how many units/ customers/subscriptions before this is profitable?"

How to calculate it

The formula only needs three inputs: fixed costs, price per unit, and variable cost per unit.

Find the contribution margin per unit — price minus variable cost. This is what each sale actually contributes toward covering fixed costs.
Divide total fixed costs by the contribution margin per unit. The result is the number of units you need to sell to break even.
Multiply that unit count by the price to get break-even revenue — the sales figure at which profit is exactly zero.

Fixed costs stay the same regardless of how many units you sell (rent, base salaries, insurance).
Variable costs scale with each unit sold (materials, shipping, payment processing fees).
The contribution margin must be positive — if variable cost exceeds price, every sale loses money and no volume ever breaks even.

A worked example

Take a subscription product with €4,000 in monthly fixed costs, a €25/month price, and €15 of variable cost per subscriber (support, hosting, payment fees). The contribution margin is €25 − €15 = €10 per subscriber. Dividing €4,000 by €10 gives a break-even point of 400 subscribers — at that volume, monthly revenue of €10,000 exactly covers costs. The 401st subscriber is the first one that's pure profit.

Limitations to know

Break-even analysis assumes costs and price stay linear — no volume discounts, no step-changes in fixed costs as you scale (e.g. hiring a second manager once you outgrow one team), and a single product or a stable sales mix across products. It also ignores the time value of money and taxes. For a course that pushes further into cost behavior — including step-fixed costs and multi-product break-even — see the related course below.

Frequently asked questions

Fixed costs stay the same no matter how many units you sell — rent, base salaries, insurance, software subscriptions. Variable costs scale with each unit sold — materials, shipping, per-transaction payment fees, sales commissions. If a cost changes when volume changes, it is variable; if it does not, it is fixed.