Break-Even Calculator
Find the exact units and revenue needed to cover all your costs, with a visual revenue vs. cost chart.
Break-Even Units
286
Break-Even Revenue
$17,143
Contribution Margin
$35
CM Ratio
58.3%
Profit = Revenue − Total Cost. Break-even is where lines intersect.
How to Use the Break-Even Calculator
1. Enter Your Fixed Costs. Include every cost that stays the same regardless of how much you sell in a given month — rent, salaries, insurance, loan payments, and software subscriptions. Use a monthly figure and make sure it reflects your full, realistic overhead rather than just the obvious line items like rent.
2. Enter Your Variable Cost per Unit. This is the cost that scales directly with each sale — raw materials, packaging, a per-unit shipping cost, or direct labor tied to producing one unit. Unlike fixed costs, this number should represent one single unit, not your total monthly spend on materials.
3. Enter Your Selling Price per Unit. Use the actual price you charge customers for one unit of what you sell. The gap between this number and your variable cost per unit is your contribution margin — the amount each sale actually contributes toward covering your fixed costs.
4. Read Your Results. The calculator shows your Break-Even Units (how many you need to sell to cover all costs), your Break-Even Revenue (the same figure in dollars), your Contribution Margin per unit, and your CM Ratio (contribution margin as a percentage of price). The chart plots your revenue line against your total cost line — everything to the left of where they cross is a loss, everything to the right is profit.
Renata runs a seasonal gift boutique with $10,000 in monthly fixed costs, a $25 variable cost per unit, and a $60 selling price — landing on a $35 contribution margin, a 58.3% CM ratio, and a break-even point of 286 units a month, or $17,143 in monthly revenue. She'd been treating that 286-unit figure as a hard monthly target and panicking every January and February when sales dropped to barely 120 units a month, well under half of what the calculator said she needed. What surprised her was realizing the 286 figure was only meaningful as a full-year average — her shop did the bulk of its business in November and December, when she regularly sold 800-900 units combined, more than making up for the quiet months that followed. She switched from tracking break-even on a strict month-by-month basis to tracking it cumulatively across the year, which matched how her actual cash flow worked far better than chasing an even monthly number never designed for a seasonal business.
Key Terms
Fixed Costs
Expenses that stay constant no matter how many units you sell in a given period — rent, salaries, insurance, and loan payments are common examples. These costs have to be covered regardless of sales volume, which is exactly why they're the starting point of the break-even formula.
Variable Cost per Unit
The cost that scales directly with each additional unit sold — materials, direct labor, or packaging tied to a single sale. Unlike fixed costs, this number rises and falls with your sales volume rather than staying constant month to month.
Selling Price per Unit
The price you charge a customer for one unit of your product or service. Subtracting your variable cost per unit from this number gives you your contribution margin, the figure that determines how quickly each sale chips away at your fixed costs.
Contribution Margin
Selling price minus variable cost per unit — the dollar amount each individual sale contributes toward covering fixed costs, and eventually, profit. A higher contribution margin means fewer units needed to break even, all else being equal.
CM Ratio
Contribution margin expressed as a percentage of selling price, showing what portion of each revenue dollar is left after variable costs to help cover fixed costs. A higher CM ratio generally signals a more scalable business.
Break-Even Units & Revenue
The number of units — or the equivalent dollar amount — needed to fully cover both fixed and variable costs, with zero profit or loss. Selling beyond it means every additional sale contributes pure profit.
Why Your Monthly Break-Even Number Can Mislead a Seasonal Business
This calculator gives you a single, clean number: sell this many units this month, and you've covered your costs. For a business with steady, predictable sales, that number is exactly the target to watch. For a seasonal business — a holiday retailer, a tax preparer, a landscaping company, an ice cream shop — treating that same monthly figure as a fixed target every single month can create unnecessary alarm during the slow season and a false sense of security during the busy one.
The Math Assumes an Even Distribution That Seasonal Sales Don't Follow
A break-even point of 286 units a month is really a full-year average expressed as a monthly rate — dividing annual fixed costs by twelve and assuming sales land evenly across every month. A business that does most of its volume in two or three peak months was never going to hit that same number in its quiet months, and comparing actual sales to the monthly figure during the off-season measures the business against a target it was never designed to meet on a monthly basis.
Cumulative Tracking Tells a Truer Story
Instead of asking "did I hit 286 units this month," a seasonal business is better served asking "am I on pace to hit roughly 3,432 units across the full year" — the same break-even figure, just tracked as a running annual total rather than reset every 30 days. A slow January isn't a crisis if a strong November and December are still ahead; it's simply the normal shape of a seasonal sales curve.
What This Means in Practice
If your sales genuinely swing with the seasons, run this calculator once using your full annual fixed costs and annual expected unit sales to get a true annual break-even figure, then compare your actual cumulative sales against that running total throughout the year instead of resetting your expectations every single month. The monthly number is still useful for spotting a real problem — but only once you know what a normal seasonal dip is supposed to look like for your specific business.