What are fixed costs?

Fixed costs remain the same regardless of production volume. Examples include rent, salaries, insurance, and loan payments.

What are variable costs?

Variable costs change with production volume. Examples include raw materials, packaging, shipping, and sales commissions.

How can I lower my break-even point?

Reduce fixed costs, lower variable costs, or increase your price. Each of these widens your contribution margin.

What is contribution margin?

Contribution margin is the difference between the selling price and variable cost per unit. It shows how much each unit sold contributes to covering fixed costs.

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Every business needs to know its break-even point — the number of units sold where total revenue equals total costs. This calculator helps you determine that critical threshold for pricing and planning.

Break-Even Calculator

Total Fixed Costs

Price per Unit

Variable Cost per Unit

Results

Break-Even Units

1,667

Break-Even Revenue

$83,350.00

Contribution Margin

30.00%

Contribution Margin Ratio

60.00%

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How It Works

The break-even point is where your contribution margin (price minus variable cost) covers all fixed costs. Below this point, you lose money; above it, you profit.

Formula

Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)

Assumptions

Fixed costs remain constant
Variable costs are per-unit
Price per unit is constant
Single product analysis

This calculator provides estimates for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making financial decisions.

Frequently Asked Questions

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