What if I sell more than one product?

Use a weighted average: the average price and average variable cost across your sales mix. The break-even is only right as long as the mix holds.

What's a good margin of safety?

It depends on how steady your sales are. Seasonal or lumpy businesses want more cushion — 20% or more is a comfortable place to be.

What does operating leverage tell me?

How sensitive profit is to sales. At 3×, a 10% drop in sales cuts profit by about 30%. Businesses with high fixed costs have high leverage — great when sales grow, painful when they don't.

Business & Pricing

Break-Even Point Calculator

How many units you have to sell before you stop losing money — plus your margin of safety, what it takes to hit a profit goal, and profit at different sales levels.

Ben / Reviewed Sep 27, 2026 / v2.0.0

Results

Showing the numbers you calculated

Break-even units: 3,334; 3,333.33 exactly, rounded up
Break-even sales: $83,333.33
Contribution per unit: $15.00; 60.00% of the price
Profit at expected sales: $25,000.00
Margin of safety: 33.33%; $41,666.67 of sales above break-even
Operating leverage: 3.00×; A 10% sales change moves profit by this × 10%
Units for your target: 5,334; $133,333.33 of sales

Profit at different sales levels

Swipe the table sideways to see all 7 columns.

Profit at different sales levels
Level	Units	Sales	Variable costs	Contribution	Fixed costs	Profit
Break-even	3,334	$83,350.00	$33,340.00	$50,010.00	$50,000.00	$10.00
50% of expected	2,500	$62,500.00	$25,000.00	$37,500.00	$50,000.00	($12,500.00)
75% of expected	3,750	$93,750.00	$37,500.00	$56,250.00	$50,000.00	$6,250.00
Expected	5,000	$125,000.00	$50,000.00	$75,000.00	$50,000.00	$25,000.00
125% of expected	6,250	$156,250.00	$62,500.00	$93,750.00	$50,000.00	$43,750.00
150% of expected	7,500	$187,500.00	$75,000.00	$112,500.00	$50,000.00	$62,500.00

What this does

Every sale chips away at your fixed costs — rent, salaries, insurance — until they're covered. The break-even point is where that happens: sell less and you lose money, sell more and you make it.

This finds that point in units and dollars, shows how much cushion your forecast has, what it takes to hit a profit goal, and what profit looks like at different sales levels.

How the math works

Start with what each sale actually contributes after its own costs:

contribution per unit = price − variable cost per unit

Then see how many of those it takes to cover fixed costs:

break-even units = fixed costs ÷ contribution per unit
break-even sales = fixed costs ÷ (contribution ÷ price)

For a profit goal, add it to fixed costs:

units for a target = (fixed costs + target profit) ÷ contribution per unit

Margin of safety is how far sales can drop before you're at break-even. A small one means a slow month hurts.

Check my math: a worked example

$50,000 of fixed costs, a $25.00 price, and $10.00 of variable cost per unit, with 5,000 units expected.

Contribution: $25.00 − $10.00 = $15.00 a unit (60.00% of the price).
Break-even: $50,000.00 ÷ $15.00 = 3,333.33 units — so 3,334 units, or $83,333.33 of sales.
At 5,000 units: $25,000.00 of profit, and sales could fall 33.33% before you're at break-even.
For $30,000.00 of profit: 5,334 units.

These numbers come straight from the calculator using its example inputs — if the math ever changes, this example changes with it.

Mistakes I see a lot

Putting fixed costs in variable cost (or the other way around). Rent doesn't go up when you sell one more widget.
Forgetting the small variable costs — card fees, shipping, commissions — that eat into every sale.
Mixing periods: monthly fixed costs with annual sales.
Assuming the price holds at any volume. Discounts to sell more lower your contribution.

Questions people ask

What if I sell more than one product?: Use a weighted average: the average price and average variable cost across your sales mix. The break-even is only right as long as the mix holds.
What's a good margin of safety?: It depends on how steady your sales are. Seasonal or lumpy businesses want more cushion — 20% or more is a comfortable place to be.
What does operating leverage tell me?: How sensitive profit is to sales. At 3×, a 10% drop in sales cuts profit by about 30%. Businesses with high fixed costs have high leverage — great when sales grow, painful when they don't.

Assumptions and limits

One product (or one average unit) at a constant price and variable cost per unit; fixed costs stay fixed in the range you're looking at.
Everything you make, you sell — no inventory building up.
Break-even units are rounded up to whole units, since you can't sell a third of one. Break-even revenue isn't rounded.
Margin of safety is how far expected sales can fall before you hit break-even.
Operating leverage = contribution ÷ operating profit at expected sales: a 10% change in sales moves profit by about that many times 10%.
With a tax rate, the after-tax target is grossed up to pre-tax first: target ÷ (1 − tax rate).

Ben’s notes on this

Related calculators

Contribution Margin
What each sale really leaves you after its own costs, laid out as a contribution income statement — and which lever moves profit most: price, volume, or cost.
Markup and Margin
Markup and margin aren't the same number — and mixing them up is how prices end up too low. Check a price, or find the price for the markup or margin you want, and see what a discount really costs you.
Hourly Billing Rate
The hourly rate you need to charge to pay yourself, cover your expenses, and make a profit — once you account for the hours you can't bill and the invoices that don't get paid in full.
Project Profitability
Is this job actually making money? Budget vs. actual by cost category, a forecast at completion, over- and under-billing, and what it would take to hit your target margin.

Spot an error?

This is a public notebook and I do make mistakes. If a number looks off, tell me — I fix things and note the change in the changelog.

Disclaimer: Educational and planning use only. Results depend on what you enter and may not match your lender, your tax return, or professional accounting treatment. Informational content + opinions only — not tax/legal advice.

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