Break Even Calculator
CheckedThis break even calculator finds how many units you need to sell, and how much revenue that is, before fixed costs are covered. Free, no sign-up, and the result updates as you type.
Enter your numbers
The denominator is contribution per unit, not price. Divide fixed costs by the sticker price and you will believe the rent is covered at half the volume it actually takes, because every unit also drags its own landed cost, selling fee and postage along with it. On a $34.99 item with $19.40 of variable cost, only $15.59 is available to pay for anything fixed. This calculator works from that number and gives you the break-even point in units and in revenue, plus the volume that hits a profit target.
How it's calculated
Break-even units = fixed costs ÷ (price − variable cost per unit) Break-even revenue = break-even units × price
LaTeX source
\text{BEP}_{\text{units}} = \frac{F}{P - V} \qquad \text{BEP}_{\text{revenue}} = \text{BEP}_{\text{units}} \times P Worked examples
A marketplace seller with $4,800 of monthly overheads
307.9 units, $10,773.06 of revenue
$34.99 − $19.40 leaves $15.59 of contribution, a 44.56% ratio. $4,800 ÷ $15.59 is 307.9 units a month, or $10,773.06 of sales, just to reach zero. Adding a $2,000 profit target pushes it to 436.2 units — a 42% jump in volume for what looks like a modest target.
The numbers used
- Fixed costs per period
- 4800
- Price per unit
- 34.99
- Variable cost per unit
- 19.4
- Target profit
- 2000
A $60 product with round numbers
500 units, $30,000 of revenue
$24 of contribution on a $60 price is a 40% ratio, so $12,000 of fixed costs needs 500 units or $30,000 of sales. The revenue shortcut works directly too: $12,000 ÷ 0.40 is $30,000. Earning $6,000 on top takes 750 units, half as many again.
The numbers used
- Fixed costs per period
- 12000
- Price per unit
- 60
- Variable cost per unit
- 36
- Target profit
- 6000
Questions sellers ask
How do you calculate break-even?
Divide fixed costs by contribution per unit, where contribution is price minus every variable cost of one sale. $4,800 of fixed costs against $15.59 of contribution is 307.9 units. Marketplace fees, payment processing and outbound shipping are variable costs and belong in that subtraction, not in the fixed pile.
What is the BEP formula?
BEP in units = fixed costs ÷ (price − variable cost per unit). For revenue, either multiply that answer by the price or divide fixed costs by the contribution margin ratio — both give the same figure. The ratio version is the one to use when you sell a mixed catalogue and there is no single unit to count.
How do I calculate break-even sales?
Divide fixed costs by the contribution margin ratio expressed as a decimal. $12,000 of fixed costs at a 40% contribution margin needs $30,000 of sales. This works across a whole product range as long as the sales mix stays roughly steady, which is why it is the practical version for a shop with hundreds of SKUs.
How do I calculate the break-even point in Excel?
Put fixed costs in B1, price in B2 and variable cost in B3, then use =B1/(B2-B3) for units and =B1/((B2-B3)/B2) for revenue. Wrap it as =IF(B2<=B3,"no break-even",B1/(B2-B3)) so a price at or below variable cost returns a message instead of a divide-by-zero error or a misleading negative.
What is a good break-even ratio?
Lower is safer — it is the share of current sales you could lose before you start losing money. Breaking even at 60% of your current volume gives a 40% margin of safety, which is comfortable; break-even at 95% means one slow month puts you under. The lever is usually contribution margin, since fixed costs move slowly.
Is 100% ROI breaking even?
No. A 100% ROI means you doubled your money: $1,000 spent returned $1,000 of profit on top of the original stake. Breaking even is 0% ROI, where you get the stake back and nothing more. The confusion comes from return on ad spend, where 1.0x ROAS is break-even on revenue but still a loss once product cost is deducted.
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