Find out how many units you need to sell to cover your costs. Interactive cost-revenue chart, what-if analysis, and contribution margin. Free and instant.
Fixed and variable costs
Selling price per unit
Break-even, chart & analysis
Break-even analysis is an essential tool for every entrepreneur. It reveals how many units of a product or service you need to sell to cover all business costs, both fixed and variable.
The formula is: Break-even = Fixed Costs / (Selling Price - Variable Cost per Unit). The denominator is the contribution margin: how much each sale contributes toward covering fixed costs.
The What-If mode lets you simulate price changes and see how the break-even point shifts. It is invaluable for optimizing your pricing strategy.
The margin of safety shows how far current sales exceed the break-even point: the higher it is, the more resilient your business is to demand drops.
The break-even point is the sales level where total revenue equals total costs — no profit, no loss. Beyond this point, every additional unit sold generates net profit. It is a fundamental analysis for any business plan and for evaluating the economic feasibility of a project.
The formula is: Fixed Costs / (Selling Price - Variable Cost per Unit). For example, with $10,000 in fixed costs, a $50 selling price, and $25 variable cost, break-even is 10,000 / (50-25) = 400 units. Break-even revenue is 400 × $50 = $20,000.
Fixed costs remain constant regardless of production volume: rent, salaries, insurance, depreciation. Variable costs change with the volume produced: raw materials, packaging, sales commissions, shipping costs.
The contribution margin is the difference between the selling price and the variable cost per unit. It shows how much each unit sold “contributes” toward covering fixed costs. The higher it is, the fewer units you need to break even.
Three strategies: 1) Reduce fixed costs (renegotiate rent, outsource). 2) Reduce variable costs (cheaper suppliers, automation). 3) Increase the selling price (if the market allows). Use the What-If mode to simulate each scenario.
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