Break Even Calculator

Break even volume

Subtract variable cost per unit from selling price to obtain contribution per unit. Fixed cost divided by this contribution gives the break even volume. Fixed cost of 18000, price of 100 and variable cost of 20 require 225 units, generating revenue of 22500.

Target and limits

Add target profit to fixed cost to find the volume needed for that target. All costs and targets must refer to the same period. For indivisible products use the minimum whole unit result. The model assumes a single product with constant price and unit cost. Capacity limits, demand, taxes and changes in sales mix are excluded.

Compare fractional quantities with whole units

Let fixed cost be 1000, selling price 70 and variable cost 30 currency units. Unit contribution is 70 − 30 = 40. The quantity at the break even point is 1000 / 40 = 25 units. For a target profit of 220, the required quantity is (1000 + 220) / 40 = 30.5. If units are indivisible, 31 units are needed. Their contribution is 31 × 40 = 1240 and period profit is 240. These prices and costs are examples only. The Minimum whole units row rounds up only the quantity at the break even point. It does not round the target profit quantity. Round 30.5 up to 31 yourself for this target.

Contribution is not the full sales revenue. First allow for the variable cost of each sale. Including fixed costs again in variable cost per unit inflates the calculated threshold. Treating unsold production as revenue can also create a false impression that the target has been reached.

As price approaches variable cost, required volume rises sharply. A mathematical result does not mean the business can sell that quantity. Examine demand, production capacity and changing prices separately. Round a target quantity upward for whole units, then check the resulting profit again using contribution.

Frequently asked questions

How do you calculate the break even point in units?

With preliminary example fixed costs of 18000, a unit price of 100 and unit variable costs of 20 in the same currency, the break even quantity is 225 units. Fixed costs are divided by contribution per unit, assuming constant prices and costs for one product and excluding demand and capacity constraints.

Calculate with these values