Break-Even Calculator
Break-even is one number that decides whether a plan is worth attempting, and it is routinely worked out wrongly — usually by dividing fixed costs by the price rather than by the contribution. This divides by the contribution, the price minus what each extra unit actually costs you, and then shows the profit at volumes either side so you can see that the answer really is where profit crosses zero rather than taking it on trust.
What this generator does
Divides fixed costs by the contribution per unit — price minus variable cost — and rounds up to the next whole unit, then builds a profit table at volumes either side. Where the price does not cover the variable cost it says so plainly rather than returning a meaningless number.
How to use this tool
- Enter your fixed costs — the ones that do not change with volume.
- Enter the selling price and the variable cost of one unit.
- Read the break-even volume and the revenue it represents.
- Check the table: profit should be negative below it and positive above.
Understanding the controls
- Fixed costs
- Costs that do not move with volume: rent, salaries, insurance. If a cost rises when you sell more, it is not fixed.
- Price per unit
- What one unit sells for, before discounts. This is not what decides the answer — the gap between it and the variable cost is.
- Variable cost per unit
- What each additional unit costs you to make or deliver. Halving this moves the break-even point far more than most people expect.
Common use cases
- Sizing a product launch before committing to it
- Teaching contribution margin with numbers a class can check
- Sanity-checking a business plan's volume assumptions
- Comparing a price rise against a cost cut on equal terms
- Working out how many units a fixed cost has to be spread over
How this generator works
Contribution is price minus variable cost. If it is zero or negative, no volume ever breaks even and selling more only deepens the loss, so the tool says so instead of returning a number. Otherwise the break-even volume is the fixed costs divided by that contribution, rounded up to a whole unit. Before display the tool recomputes profit at that volume and confirms it is zero or just above, and that one unit fewer still makes a loss — which is the actual definition of the break-even point rather than a restatement of the division.
Randomness and fairness
Nothing here is random. The same three figures always give the same answer, because this is arithmetic rather than a simulation.
For how randomness is produced across the whole site, see how Generate Random works.
Limitations and good to know
- Assumes one product at one price; a mixed basket needs a weighted average contribution, which this does not compute.
- Treats the variable cost as constant, so it will not show volume discounts or the point where a bigger machine is needed.
- Fixed costs are taken as genuinely fixed — a step change, like a second unit of rent, is not modelled.
- This is arithmetic for planning and teaching, not financial advice, and it knows nothing about your tax, VAT or working capital.
Privacy and your data
The figures are calculated in your browser and never sent anywhere. Nothing you enter is stored or included in analytics.
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