Free calculator
Break-even calculator
Work out how many units you need to sell each month to cover all your costs, and how many it takes to reach a target profit.
- Contribution per unit
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- To reach the target profit
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- Revenue for the target profit
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Contribution is the selling price minus the variable cost: the part of each sale that covers fixed costs.
Results are estimates. Costs that change and prices that differ per customer move the real break-even point.
How it is calculated
The break-even formula, with an example.
In this article
The break-even formula
The break-even point is the level of sales at which revenue equals all costs: no profit, no loss.
| What | Formula |
|---|---|
| Contribution per unit | selling price − variable cost per unit |
| Break-even (units) | fixed costs ÷ contribution |
| Units for a target profit | (fixed costs + target profit) ÷ contribution |
Fixed and variable costs
Fixed costs are paid even with no sales: rent, wages, basic utilities, subscriptions. Variable costs move with sales: materials, packaging, commission.
Example
Fixed costs of IDR 15,000,000 a month, a selling price of IDR 25,000, and a variable cost of IDR 10,000. Contribution is IDR 15,000, so break-even is 1,000 units a month (IDR 25,000,000 revenue), or about 34 units a day.
FAQ
Questions about break-even
What if my break-even point is too high?
Three levers: raise the price, cut the variable cost per unit, or reduce fixed costs. Change the numbers in the calculator to see which matters most.
What if I sell many products?
Use the average price and variable cost per transaction, or work it out for your main products. The result is an estimate, not an exact figure.
Should the owner's pay count as a fixed cost?
Ideally yes. Otherwise the business can look like it breaks even while the owner works for free.
Know when the business turns a profit, every month.
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