Breakeven Point Calculator
Free Breakeven point Calculator for pricing & profitability. Enter your numbers to see returns, costs, and optimized scenarios instantly.
Breakeven Point Calculator
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Formula: Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)
Worked example — 2,286 coffees/month | $11,430 revenue to break even
Formula
Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)
Break-even units = Fixed Costs / (Price − Variable Cost per Unit). This version adds break-even revenue = break-even units × price, margin of safety (current sales − break-even), and a sensitivity table showing how break-even shifts when price or variable cost changes by ±10%/20%. Useful for pricing decisions and scenario planning.
Worked Examples
Example 1: Coffee Shop Break-Even
Problem:A coffee shop has $8,000/month fixed costs (rent, salaries). Each coffee costs $1.50 in ingredients (variable cost) and sells for $5. How many coffees must they sell to break even?
Solution:Contribution margin: $5.00 - $1.50 = $3.50 Break-even units: $8,000 / $3.50 = 2,286 coffees Break-even revenue: 2,286 × $5 = $11,430 That is about 76 coffees per day (30-day month).
Result:2,286 coffees/month | $11,430 revenue to break even
Example 2: SaaS Product Launch
Problem:Monthly fixed costs: $25,000 (infrastructure, team). Variable cost per user: $3/month. Subscription price: $29/month.
Solution:Contribution margin: $29 - $3 = $26 Break-even subscribers: $25,000 / $26 = 962 Break-even MRR: 962 × $29 = $27,898 Contribution margin ratio: $26/$29 = 89.7%
Result:962 subscribers needed | $27,898 MRR to break even
Frequently Asked Questions
What is the break-even point?
The break-even point is the number of units you need to sell (or the revenue you need to generate) to cover all your costs — both fixed and variable. At break-even, total revenue equals total costs, and profit is zero. Selling above break-even generates profit; below it, you incur losses. It is a fundamental concept in business planning, pricing strategy, and financial analysis.
What is contribution margin?
Contribution margin is the difference between the selling price per unit and the variable cost per unit. It represents how much each unit sold 'contributes' toward covering fixed costs and generating profit. For example, if you sell a product for $45 with $15 variable cost, the contribution margin is $30. This $30 goes toward covering fixed costs first, then becomes profit once break-even is reached.
What is margin of safety?
Margin of safety is the difference between your current (or expected) sales and the break-even point. It measures how much sales can drop before you start losing money. A margin of safety of 30% means sales could decline by 30% and you would still break even. Higher margins of safety indicate lower risk. It is expressed as: Margin of Safety = (Current Sales - Break-Even Sales) / Current Sales × 100.
How do I calculate break-even point?
Break-even point is where total revenue equals total costs. In units: BEP = Fixed Costs / (Price per Unit - Variable Cost per Unit). In revenue: BEP = Fixed Costs / Contribution Margin Ratio. For example, with 50,000 dollars in fixed costs, a 100 dollar price, and 60 dollar variable cost, BEP = 1,250 units or 125,000 dollars in revenue.
References
Reviewed for accuracy by Sahil, Senior Finance & Tax Editor · Editorial policy
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