Break-even calculator ESTIMATE
Find how many units you need to sell before fixed costs are covered.
Result ESTIMATE
Contribution comes first
Each unit contributes price minus variable cost toward fixed costs. At a $50 price and $30 variable cost, contribution is $20, which is a 40% contribution margin. Fixed costs of $10,000 ÷ $20 = 500 units, or $25,000 of sales. Unit 501 is the first one that adds to operating profit, and only by about $20 before tax and other surprises.
Break-even units = Fixed costs ÷ (Price − Variable cost per unit)
What to put in each bucket
Variable costs move with the unit: materials, merchant fees on that sale, a contractor paid per job, packaging. Fixed costs sit there even if you sell nothing: base rent, a salaried manager, insurance, software subscriptions. Some costs are mixed. A phone plan with a base fee plus overage can be split, or you can rerun the calculator with the base in fixed and the per-unit piece in variable. If price is not above variable cost, there is no break-even. Every sale makes the hole deeper.
What this page leaves out
One product, one price, and costs that really are fixed across the range you care about. A second product needs a sales mix. Owner draws are not a business expense — see owner’s draw vs salary — so do not drop a draw into fixed costs and pretend it is the same as wages. Taxes are not in the unit cost unless you deliberately put a tax cost there. Pair this with cash runway: you can be past break-even on paper and still run out of cash if customers pay late.