Your business inputs
This calculator assumes fixed costs stay constant and the selling price and variable cost per unit do not change over the period.
How break-even is calculated
The break-even point is reached when total revenue equals total costs, meaning there is no profit and no loss.
Contribution per Unit = Selling Price − Variable Cost per Unit
Break-even Units = Fixed Costs ÷ Contribution per Unit
Break-even Revenue = Break-even Units × Selling Price
Worked example
If fixed costs are £10,000, the selling price is £50 per unit and the variable cost is £30 per unit, the contribution is £20 per unit. The business needs to sell 500 units to break even.
Frequently asked questions
What are fixed costs?
Fixed costs are expenses that generally do not change with the number of units sold, such as rent, insurance or some salaried costs.
What are variable costs?
Variable costs change with production or sales volume, such as materials, packaging or transaction fees per unit.
What if variable cost is equal to or higher than selling price?
There is no positive contribution per unit, so a normal break-even point cannot be reached under those assumptions.