Milo Quell

Free Tool

Break-Even Point Calculator

Find how many units you need to sell before a product starts making money.

$
$
$

Break-even point

400 units

to cover all your costs

Break-even revenue

$16,000

Contribution margin

$25 (63%)

Each unit sold contributes $25 toward fixed costs. Once you've sold 400, every further sale is profit.

The number every product needs

Before a product makes a cent of profit, it has to pay back what it cost to bring to market. The break-even point is the exact moment that happens — the number of units at which total revenue finally equals total cost. It's the first question any pricing decision, launch plan or side hustle should answer.

The mechanics are simple once costs are split in two. Fixed costs are what you pay no matter what you sell; variable costs rise with each unit. The gap between your price and the variable cost is the contribution margin, and dividing fixed costs by that margin tells you how many sales it takes to get to zero. Everything after that is profit — which is why raising price or trimming variable cost moves the break-even point so sharply.

Frequently asked

How do you calculate the break-even point?

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). The denominator is the contribution margin: the profit each sale contributes toward covering fixed costs. Once you sell enough units to cover those fixed costs, you break even.

What is contribution margin?

Contribution margin is the price of a unit minus its variable cost — the amount each sale contributes toward fixed costs and, eventually, profit. If you sell at $40 and each unit costs $15 to make, the contribution margin is $25 per unit, or 62.5% of the price.

What is the difference between fixed and variable costs?

Fixed costs stay the same regardless of how much you sell — rent, salaries, insurance, software. Variable costs rise with each unit — materials, packaging, payment fees, shipping. Splitting your costs this way is what makes a break-even calculation possible.

What happens if price is below variable cost?

Then every sale loses money and there is no break-even point — selling more only deepens the loss. The price must exceed the variable cost per unit so each sale contributes something toward fixed costs. This calculator flags that situation for you.

Keep going

Work out everyday margins, markups and discounts in seconds.

Percentage Calculator →
Milo Quell — amused

Feed Your Curiosity.

One fascinating idea, every week. No spam. Just things worth knowing.

No spam. One email a week. Unsubscribe any time.