Cost & Pricing
Rent, salaries, insurance, etc.
Materials, labor per unit
Optional profit goal
Break-Even Analysis
Break-Even Units
286
Break-Even Revenue
$17,142.86
Contribution Margin
$35.00
per unit
CM Ratio
58.3%
To reach $5,000.00 profit:
Sell 429 units for $25,714.29 in revenue
Frequently Asked Questions
What is the break-even formula?
Break-Even Units = Fixed Costs ÷ (Price Per Unit − Variable Cost Per Unit). The denominator is called the "contribution margin" — the amount each sale contributes to covering fixed costs and generating profit.
What is contribution margin?
Contribution Margin = Selling Price − Variable Cost Per Unit. It represents how much each unit sold contributes toward covering fixed costs. Once total contributions exceed fixed costs, you reach break-even.
How can I lower my break-even point?
You can lower it by: (1) Reducing fixed costs like rent or salaries, (2) Increasing prices, (3) Reducing variable costs through better sourcing, (4) Improving your product mix to favor higher-margin items.
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