Break-Even Sales Calculator
Instantly calculate your break-even point in units and sales dollars. Understand your fixed costs, variable costs, and contribution margin to plan for profitability.
Break-Even Point or Target Profit?
Whether you need to find the exact sales volume to cover your costs or want to calculate the revenue required to hit a specific profit goal, pick the tool below.
Break-Even Calculator
Enter your costs and pricing to find your break-even point
Rent, salaries, insurance, etc.
Must be less than selling price
Break-Even Result
Units, sales dollars, and margin breakdown
Enter your costs and pricing, then click Calculate Break-Even.
Target Profit Calculator
Find the sales volume needed to achieve a specific profit
The net profit you want to achieve
Target Profit Result
Required revenue, units, and cost breakdown
Enter your details and profit goal, then click Calculate Required Sales.
Break-Even Key Terms
Understanding these fundamental business metrics will help you make smarter pricing and cost-management decisions.
| Term | Definition | Formula |
|---|---|---|
| Fixed Costs | Expenses that do not change with production volume. | Rent, Salaries, Insurance |
| Variable Costs | Expenses that fluctuate directly with production volume. | Raw Materials, Direct Labor |
| Contribution Margin | Revenue remaining after variable costs are deducted. | Selling Price – Variable Cost |
| CM Ratio | Percentage of each sales dollar available to cover fixed costs. | Contribution Margin ÷ Selling Price |
| Break-Even Point (Units) | Number of units to sell to cover all costs (zero profit). | Fixed Costs ÷ Contribution Margin |
| Break-Even Point (Sales) | Total revenue needed to cover all costs (zero profit). | Fixed Costs ÷ CM Ratio |
| Margin of Safety | How much sales can drop before the business reaches break-even. | Actual Sales – Break-Even Sales |
Break-Even Analysis FAQ
Everything you need to know about calculating and improving your break-even point.
The break-even point is the level of production or sales at which total revenues equal total costs. At this point, a business neither makes a profit nor incurs a loss. It is a crucial metric for understanding the minimum performance required to avoid losing money.
To calculate the break-even point in sales dollars, use the formula: Break-Even Sales = Fixed Costs ÷ Contribution Margin Ratio. The Contribution Margin Ratio is calculated as (Selling Price per Unit – Variable Cost per Unit) ÷ Selling Price per Unit.
The contribution margin is the selling price of a product minus its variable costs. It represents the portion of sales revenue that is not consumed by variable costs and therefore contributes to the coverage of fixed costs and generation of profit.
Fixed costs remain constant regardless of production volume (e.g., rent, salaries, insurance). Variable costs fluctuate directly with production volume (e.g., raw materials, direct labor, shipping costs).
You can lower your break-even point by: 1) Reducing fixed costs (e.g., negotiating lower rent), 2) Reducing variable costs per unit (e.g., finding cheaper suppliers), or 3) Increasing the selling price per unit (if the market allows).