Break-Even Price Calculator
Calculate the break-even units and revenue for a product, plus the units needed to hit a target profit. Enter fixed costs, variable cost per unit, selling price, and a profit goal to plan your pricing and sales.
Formula
Contribution Margin = Selling Price − Variable Cost; Break-Even Units = Fixed Costs ÷ CM; Units for Target = (Fixed Costs + Target Profit) ÷ CM
$50,000 fixed, $150 variable, $250 price, $20,000 target
Inputs
- Fixed Costs: 50000
- Variable Cost per Unit: 150
- Selling Price per Unit: 250
- Target Profit: 20000
Contribution margin = 250 − 150 = $100. Break-even = 50,000 ÷ 100 = 500 units; reaching a $20,000 profit needs (50,000 + 20,000) ÷ 100 = 700 units.
Frequently asked questions
What is the break-even point?
It's the number of units (and revenue) at which sales exactly cover all fixed and variable costs — no profit, no loss.
How do I find units needed for a target profit?
Add the target profit to fixed costs, then divide by the contribution margin per unit. The result is the sales volume that delivers that profit.
What is the contribution margin ratio?
It's the contribution margin divided by the selling price — the share of each sale available to cover fixed costs and build profit.
Why must price exceed variable cost?
If the selling price is below the variable cost, each unit loses money and no sales volume can reach break-even.