Unit-based break-even
Outputs the number of units required to cover fixed costs and target profit.
Calculate how many units you need to sell to cover fixed costs, variable costs, and an optional target profit.
Break-even units = (fixed costs + target profit) ÷ (selling price per unit - variable cost per unit)
Outputs the number of units required to cover fixed costs and target profit.
Shows how much of each sale contributes to fixed costs and profit.
Adds optional target profit to model more than just zero-profit break-even.
Break-even analysis shows how much volume is needed before a product, service, campaign, or business line starts producing profit. The most important input is contribution per unit: selling price minus variable cost. If contribution is too small, even a large sales volume may not cover fixed costs quickly.
Use break-even before launching a product, buying inventory, hiring staff, renting space, or starting an ad campaign. Recheck the result when costs, price, conversion rates, or target profit change.
| Input | What it means | Planning note |
|---|---|---|
| Fixed costs | Rent, salaries, software, equipment, setup | Costs that do not change directly with each unit sold. |
| Selling price | Revenue per unit | Use average selling price if products vary. |
| Variable cost | Cost that scales with each unit | Materials, fulfillment, commissions, and direct labor. |
| Target profit | Optional profit goal above break-even | Useful for launch or campaign planning. |
Check required sales before buying inventory.
Estimate whether expected volume can cover campaign cost.
Test whether a service package covers labor and overhead.
It is the sales volume where total revenue covers total fixed and variable costs.
Contribution margin is selling price minus variable cost, often shown as a percentage of price.
Only if fixed cost and target profit are zero. If variable cost is higher than price, the model cannot break even.
Include target profit when you want to calculate the volume needed for a specific profit goal, not just zero profit.
Last reviewed: July 30, 2026. Use these results for planning, then confirm business, tax, and accounting decisions with your own records.
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