Break-Even Point Calculator

  • Published: April 28, 2025, 05:52 am EDT
  • Last Modified: October 19, 2025, 01:43 am EDT

Break-Even Point Calculator

Use this quick tool from GlimMarket to find the exact sales volume or revenue you need to cover costs: no spreadsheets required.

Enter your fixed costs, variable costs, selling price per unit and anticipated number of units to sell to see results in units and dollars.

Designed for small businesses, freelancers, and product managers who need a fast, reliable break-even check before pricing or launch decisions.

More Business Calculators

More Business Calculators

How to use this calculator

This calculator accepts multiple fixed-cost and variable-cost line items, a selling price per unit, and your expected sales volume.

  • List each fixed-cost head (rent, salaries, insurance) so the tool can sum them and show total fixed costs.
  • Add each variable-cost head (materials, labor, supplies) to compute the exact variable cost per unit.
  • Enter the selling price and the number of units you expect to sell to test a real scenario.

The results area shows break-even units and break-even sales value, contribution per unit, total fixed and variable costs, and the profit or loss for the sales quantity you entered.

Use these outputs to compare price or cost changes quickly. For example, change one ingredient cost and rerun to see the impact on break-even.

Every result on the page is calculated from the numbers you enter; treat them as planning figures to inform pricing, promotions, and production decisions.
This tool and its calculations are reviewed by our in-house finance team for accuracy.

What Is Break-Even Point

The break-even point is the sales level at which a business’s revenue exactly covers all costs, fixed and variable, so profit is zero. Below that level you lose money; above it you earn profit.

Use break-even analysis to set pricing, size production runs, and test whether a project or product can pay for itself.

>> Meet your small business financing needs with Small Business Loans Guide

Break-even Chart

Break-even Point Calculator infographic showing the BE chart

What Is a Fixed Cost

Fixed costs stay the same regardless of output during the period measured: rent, salaried wages, insurance, and equipment depreciation are common examples. These costs set the baseline revenue your business must cover before any profit appears.

In Fixed costs, total cost will remain fixed irrespective of the volume of output but the fixed cost per unit vary.

Examples of fixed costs include rent for a store or office, salaries for regular staff, insurance payments, depreciation on equipment, and utility bills that don’t change with production.

If the monthly rent of a bakery is $2,000, they have to pay it whether they sells 100 loaves or 1,000.

What Is a Variable Cost

Variable costs are the expenses that change depending on how much a business produces or sells. They rise when production goes up and fall when it goes down, tied directly to the making or selling of goods or services.

In Variable Costs, total cost will vary depending on the volume of output but the variable cost per unit remain fixed.

These costs are central to the break-even point because they affect how much revenue is needed to cover all expenses.

Examples of variable costs include raw materials, direct labor for workers paid per item, packaging supplies, and shipping fees that grow with sales volume.

For instance, if a bakery uses $1 of ingredients per loaf, the variable cost is $100 for 100 loaves and $1,000 for 1,000 loaves.

>> Calculate your current assets position, use our free Current Ratio Calculator

How to Calculate a Break-Even Point

Start with these numbers: total fixed costs, variable cost per unit, and selling price per unit.

Break-even Point in Units

  • Calculate Contribution per unit = Selling price per unit − Variable cost per unit.
  • Break-even (units) = Total fixed costs ÷ Contribution per unit.

Break-even Point in dollars (value)

To get break-even in dollars: 

  • Calculate the Contribution margin ratio = Contribution per unit ÷ Selling price per unit
  • Break-even (revenue) = Fixed costs ÷ Contribution margin ratio.

Enter your numbers in the calculator to see both outputs instantly.

What is the Basic BEP Formula; Explained with Example

The break-even point relies on a formula that brings together fixed costs, variable costs, and selling price to find the sales needed to balance revenue and expenses. 

Let’s look at a coffee shop to show how it works in practice.

CategoryAmount ($)
Fixed Costs 
Rent3,000
Staff Salaries4,000
Insurance500
Total Fixed Costs7,500
Variable Costs (per coffee) 
Ingredients1.50
Cups and Supplies0.50
Total Variable Cost per Unit2.00
Selling Price per Coffee5.00

To find the break-even point in units, we use the formula:

Contribution per unit = Selling Price per Unit – Variable Cost per Unit
= $5 – $2 = $3

Break-Even Point (Units) = Total Fixed Costs ÷ (Selling Price per Unit – Variable Cost per Unit)
= 7,500 / $3 = 2,500 units

That coffee shop must sell 2,500 cups per month to cover $7,500 in fixed costs. Above 2,500 cups the shop earns profit; below that it runs at a loss. Use this result to test price changes, promotions, or cost reductions.

How to Analyse Your Break-Even Point

The break-even number is a planning target, not a guarantee, treat it as a clear threshold to compare against real sales.

  • First, compare break-even units or revenue to your current or forecasted sales: if your forecast sits well above the break-even, the business can cover costs and earn profit; if it sits below, you need a plan to close the gap.
  • Look at the contribution per unit: this shows how much each sale contributes toward fixed costs after covering variable cost.
  • Check the split between total fixed and total variable costs to find which cost type is driving your break-even level.
  • Run quick scenarios: change price, trim a variable input, or cut a fixed expense and see how the break-even shifts.
  • Use the results to set concrete actions: monthly sales targets, promotional windows, or cost-reduction milestones tied to the break-even figure.

Record the inputs and results so you can compare actual performance to the plan and adjust decisions with data, not guesswork.

How Can Reduce the Break-Even Point

When you lower your break-even point, your business can cover its total costs with fewer sales, improving its financial position. This point reflects the sales level where revenue equals fixed costs and variable costs combined.
The following measures will help you reduce it:

  • Decrease total fixed costs by renegotiating contracts, such as rent or insurance, to lessen the regular expenses that sales must cover.
  • Lower variable costs per unit through bulk purchasing of materials, reducing the cost tied to each product sold and raising the contribution margin.
  • Increase the selling price per unit where market conditions allow, boosting revenue per sale to cover fixed costs with fewer units.
  • Shift sales focus to products with higher contribution margins, requiring less volume to meet the total cost of operations.
  • Improve production efficiency to cut waste in materials or labor, decreasing variable costs and easing the sales level needed for balance.

>> Explore our  Debt Equity Ratio Calculator to find out your business solvancy.

Frequently Asked Questions- FAQs

The break-even point is the exact sales level where your total revenue equals your total costs- neither profit nor loss. It’s a crucial financial checkpoint that helps you:

  • Know the minimum units or revenue required to cover all costs.

  • Plan realistic sales targets and pricing strategies.

  • Test how changes in price, cost, or volume affect profitability.

For a precise result, enter values that reflect your real cost structure:

  • Fixed costs: Overheads that stay the same regardless of sales (e.g., rent, insurance, salaries).

  • Variable costs: Costs that change with each unit produced or sold (e.g., raw materials, packaging, commission).

  • Selling price per unit: The amount you charge customers for each unit.

  • Expected units to sell: Your estimated or targeted sales volume.

Break-even analysis is a regular strategic tool for managers. You can use it to:

  • Test pricing strategies: See how different price points affect your break-even volume.

  • Assess cost structure: Identify whether fixed or variable costs are pushing the break-even higher.

  • Plan profit margins: Set sales targets that go beyond break-even and build a healthy profit cushion.

  • Guide cost cuts or investments: Check how adjusting costs or production levels impacts profitability.

This break-even calculator and its explanations are provided strictly for informational and educational purposes. We do not offer financial, legal, or investment advice, and the calculations or examples shared should not be treated as professional recommendations. GlimMarket has no financial interest in any specific businesses, products, or services mentioned. Every business scenario is different, so we strongly encourage you to review your numbers carefully and consult qualified financial professionals before making any business or investment decisions.

Written By

Facebook-f Huge-linkedin-02 Icon-email
Archana N profile image as editor with GlimMarket

Archana N

Senior Writer & Content Strategist

Archana N is a seasoned content strategist and senior writer with over 12 years of …

SEE FULL BIO

Expert Reviewed By

Facebook-f X-twitter Instagram Huge-linkedin-02 Icon-email
Dileep K Nair, Founder, Managing Director and Expert Reviewer at GlimMarket

Dileep K Nair CMA

Founder & Expert Reviewer

Dileep K Nair is a Certified Management Accountant (CMA) from IMA, USA and brings over 19 years…

SEE FULL BIO

Related Articles

Focus on Growth, We’ll Handle the Books

Free up your time by outsourcing your accounting to professionals who understand small businesses.

>> Explore Now

What’s Next?

Discover Grants, Loans, and Readiness Tips for Small Businesses

You Might Also Like

Office table with using Break-even point calculator reflectin analysis and interpretation of break-even point

CONNECT WITH US

Subscribe now to receive regular updates, reports, and exclusive invitations from GlimMarket

CONNECT WITH US

Subscribe now to receive regular updates, reports, and exclusive invitations from GlimMarket

CONNECT NOW
collaboration

JOIN US

Follow GlimMarket on Social Media for straightforward insights, tools, and tips to help you make better financial decisions

JOIN US

Join us on social media to stay updated with the latest insights and updates on everything finance.

Follow us

About GlimMarket

Insights

Top Choices

Business Categories

Legal

Tools and Guides

Glim Market

Built as a US-based financial marketplace, GlimMarket connects people and businesses with the right lending, banking and personal finance options.

Learn more
 Copyright © GlimMarket, USA. All Rights Reserved
Scroll to Top

CONNECT WITH US

JOIN US

“Stay connected with us! Follow our social media pages to keep up with the latest developments and insights you won’t want to miss!”
Linkedin-in X-twitter Icon-facebook Instagram Pinterest-p