#688 · Business Tool

Contribution Break Even Calculator

Use this contribution break even calculator to find the sales volume and revenue needed to cover fixed costs.

Calculator

Fixed cost, price, variable cost, sales
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$
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units
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How to use this calculator

Enter fixed costs, selling price, variable cost per unit, and current sales volume. The calculator estimates break-even units and the margin of safety.

What the result means

Break-even units show the sales volume required to cover fixed costs. Margin of safety shows how far current sales are above or below break-even.

Contribution per unit = Price - variable cost. Break-even units = Fixed costs ÷ contribution per unit. Break-even revenue = break-even units × price.

If variable cost is equal to or higher than price, the product cannot break even before fixing pricing or cost structure.

Example calculation

With $50,000 fixed costs, $100 price, and $45 variable cost, contribution is $55 per unit and break-even volume is about 910 units.

Tips for better results

  • Use recent numbers rather than optimistic guesses.
  • Run the calculator again after changing price, cost, or conversion assumptions.
  • Treat the result as a planning estimate, not audited financial advice.

FAQ

How many units do I need to sell to break even?

Divide fixed costs by contribution per unit. Contribution per unit equals selling price minus variable cost per unit.

How much revenue do I need to cover fixed costs?

Break-even revenue equals break-even units multiplied by selling price, or fixed costs divided by contribution margin ratio.

What is a good contribution margin percentage?

A good contribution margin depends on the business model, but higher contribution margin gives more room to cover fixed costs and generate profit.

How do I calculate break-even sales volume?

Calculate contribution per unit, then divide fixed costs by contribution per unit to get break-even sales volume.

How can I reduce my business break-even point?

Lower fixed costs, increase prices, reduce variable costs, or sell higher-margin products to reduce the break-even point.

Metric guide

MetricMeaning
Contribution per unitPrice minus variable cost
Break-even unitsUnits required to cover fixed costs
Margin of safetyCurrent revenue above break-even revenue

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