Break-Even Point Calculator
How many units cover your costs, the revenue that represents, and how far sales can fall before you lose money.
Each unit contributes $25.00 toward fixed costs. After 2,000 units those costs are covered and every additional unit is profit. Margin of safety is how far sales can fall from expectations before the business starts losing money.
Every unit sold contributes its price minus its variable cost toward fixed costs. That contribution margin is the engine of the calculation: divide fixed costs by it and you get the number of units at which the business exactly covers everything. Past that point, each additional unit is profit at the full contribution margin.
Frequently asked questions
What counts as a fixed cost?
Costs that do not change with volume: rent, salaries, insurance, software subscriptions. Variable costs scale with each unit, such as materials, shipping, payment processing, and sales commissions. Some costs are mixed and should be split.
What is margin of safety?
How far sales can fall from your expectation before reaching break-even, as a percentage. A 33% margin of safety means sales could drop a third and the business would still cover its costs, which is a direct measure of operating resilience.
Why is there no break-even if price is below variable cost?
Because every sale loses money before fixed costs are even considered. Volume makes it worse rather than better, and no quantity produces a profit. The price or the cost structure has to change first.
How does this apply to a subscription business?
Use monthly contribution per subscriber against monthly fixed costs to find the subscriber count that covers the business. Customer acquisition cost and churn then determine how long each subscriber must stay to repay the cost of winning them.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.