Formula
We subtract variable cost from sale price first, then divide fixed costs by the contribution margin per unit to find the break-even point.
Formula: Break-even units = fixed costs ÷ (sale price - variable cost)
Business / United States
Break-even point calculator
Estimate how many units you need to sell, and how much revenue you need, to cover fixed and variable costs.
Calculate break-even
Break-even = fixed costs ÷ (sale price - variable cost)
Rent, payroll, equipment depreciation, and other recurring fixed costs
What the customer pays for one piece, order, or service
Ingredients, shipping, packaging, or direct delivery cost
Assumptions
- Uses USD for the example
- Sale price and variable cost stay constant during the calculation period
- Taxes, discounts, and special fees are not included unless you add them yourself
Quick visual
Quick example
A bakery with oven depreciation and rent totaling $30,000 per month, selling pastries at $45 each, and variable costs like flour, sugar, eggs, and packaging at $18 per item breaks even at about 1,112 pieces, or about $50,000 in sales.
Contribution margin per unit = 45 - 18 = 27 dollars
Break-even units = 30,000 ÷ 27 = 1,111.11 units
Round up to 1,112 units.
Common mistakes
- Putting all monthly costs into variable cost
- Forgetting to include equipment depreciation or rent in fixed costs
- Using sale price before deducting direct variable costs
Need help?
Read the full instructions and assumptions for this calculator.