Fixed costs, Price per unit, Variable cost per unit
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How this calculator works
Each unit sold contributes its price minus its variable cost toward paying fixed costs such as rent and salaries. The break-even point is where those contributions add up to exactly the fixed costs. Sales beyond it are profit; below it, the business is losing money.
Formula
- Contribution margin per unit = price − variable cost per unit
- Break-even units = fixed costs / contribution margin per unit
- Break-even revenue = break-even units × price
Worked example
Fixed costs 10,000, price 50, variable cost 30
- Fixed costs
- 10,000
- Price per unit
- 50
- Variable cost per unit
- 30
Result500 units
Sales needed to cover fixed costs of 10,000.00, with 20.00 contributed per unit.
Things to keep in mind
- The model assumes price and unit cost stay constant at every sales volume.
- Figures are estimates for planning. They are not financial advice, and they ignore taxes and fees unless stated.
Frequently asked questions
What is a break-even point?
The sales level at which total revenue equals total cost, so profit is zero.
What counts as a fixed cost?
Costs that do not change with volume in the short run, such as rent, insurance and salaried staff. Materials and shipping per item are variable costs.
How can I lower my break-even point?
Raise the price, cut the variable cost per unit, or reduce fixed costs. Each increases the contribution per unit or shrinks what it has to cover.
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Results are estimates based on the values you enter and the published method shown above. They do not replace professional medical, financial or legal advice. Method reviewed October 7, 2026. About this site