Break-Even Analysis Calculator

Break-even is a volume, not a vibe

Fixed costs do not care how many units you meant to sell. Variable costs do. Break-even is the volume where contribution (price minus variable cost) has paid the rent, the software, and the salaries in the fixed box. Below that volume you are funding the month from cash. Above it, each extra unit is contribution toward profit.

Defaults: $5,000 fixed monthly costs, $20 variable cost, $50 selling price. Unit contribution margin = 50 - 20 = $30.00. Margin ratio = 30 / 50 = 60.0%. Break-even units = 5,000 / 30 = 166.7 units / month. Break-even revenue = 166.7 x 50 = $8,333.33. You cannot ship 0.7 of a physical unit; treat 167 as the operational target and keep 166.7 as the exact formula result.

CM = price - variable cost
CM ratio % = (CM / price) x 100
BE units = fixed costs / CM
BE revenue = BE units x price

Copy writes all four results plus the three inputs. If selling price is at or below variable cost, contribution cannot cover anything. The page announces "Selling price must exceed variable cost to break even", marks the price field invalid, shows n/a on volume and revenue, and disables copy.

What belongs in fixed vs variable

Fixed: rent, salaried payroll, SaaS seats, insurance, the loan payment that does not move with orders. Variable: materials, pick-and-pack, postage, payment fees, contractor piece rates. If a cost steps up every 500 units (a second warehouse picker), it is not purely fixed. Put the current step in fixed, then rerun when you cross the step.

Payment fees are variable. A 2.9% + $0.30 card rate on a $50 item is about $1.75: add it to the $20 materials if customers pay by card. The Stripe Fee Calculator and PayPal Fee Calculator give that line exactly. Ignoring it makes break-even look 5 to 10 units too optimistic.

Owner draw is not contribution. If you need $4,000/month to live, put it in fixed or you will "break even" on paper and still miss rent at home. Tax is also missing unless you add an estimate to fixed. This is a contribution-margin model, not a P&L.

After you know the unit count

166.7 units at $50 is $8,333.33 of sales. If ads have to produce that, check whether the spend still returns after COGS with the ROAS Calculator. If you are buying equipment to reach that volume, the ROI Calculator compares capital in versus value out over years. None of those pages replace a cash forecast. They stop you from pricing below cost and calling it a launch.

Rerun when price, COGS, or overhead changes, not every order. A $2 materials increase drops margin from $30 to $28 and lifts break-even from 166.7 to 178.6 units. That is the conversation with a supplier: the extra $2 is 12 units a month, not "a little more cost."

Price cuts work the other way. Drop the $50 price to $40 and keep $20 variable: margin is $20, ratio is 50%, break-even units jump from 166.7 to 250, and revenue needed is still $10,000 (250 x $40). You sold cheaper and need more volume for the same $5,000 fixed pile. If variable were $40 on a $50 price, margin is $10 and you need 500 units. If variable hits $50, the alert fires and volume is n/a. That is the model telling you the SKU cannot carry overhead, not a rounding error. Copy the summary before you change price so you can compare the two volumes in writing.

Frequently Asked Questions (FAQ)