Break-Even Point Calculator
Find the exact units and revenue you need to cover your costs, plus the contribution margin behind every sale.
Contribution margin is what each sale adds after variable costs. Divide fixed costs by it and you get the exact number of units you must sell before you make a dollar of profit.
DigiJaws builds acquisition systems that take you from covering costs to compounding profit.
Engineer My Growth →What is the break-even point? (the formula)
Your break-even point is the sales level where total revenue equals total costs — you make neither a profit nor a loss. Every sale beyond it is profit. The break-even formula in units is:
Break-even point (units) = Fixed costs ÷ (Price per unit − Variable cost per unit)
The bottom half — price minus variable cost — is your contribution margin per unit: the amount each sale contributes toward covering fixed costs.
Break-even point example
Say fixed costs are $10,000, you sell at $50, and each unit costs $30 to make. Your contribution margin is $20 per unit, so your break-even point is $10,000 ÷ $20 = 500 units, or 500 × $50 = $25,000 in sales. The calculator above does this instantly.
Break-even point in dollars
To find break-even in revenue rather than units, divide fixed costs by your contribution margin ratio:
Break-even sales ($) = Fixed costs ÷ contribution margin ratio
Where the contribution margin ratio is contribution margin ÷ price (in the example, $20 ÷ $50 = 0.40).
How to calculate break-even, step by step
- Add up your fixed costs (rent, salaries, software, and so on).
- Find your contribution margin: price per unit minus variable cost per unit.
- Divide fixed costs by the contribution margin for your break-even in units.
- Multiply by price (or divide by the margin ratio) for break-even in dollars.
How to lower your break-even point
Cut fixed costs, raise your price, or reduce the variable cost per unit. Each widens your contribution margin, which means you break even on fewer sales and reach profit faster.