What is the break-even point?
The level of sales where you are neither making a profit nor a loss — total revenue exactly covers total cost. Sell one more unit and you are in profit; one fewer and you are in loss.
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Break-even Calculator (Basic)
The number of units and the revenue at which total cost equals total revenue.
BEP (units) = Fixed Costs / (Price − Variable Cost)
Frequently asked questions
What is the contribution margin in the formula?
It is the selling price minus the variable cost of one unit — the slice of each sale left over to chip away at the fixed costs. Break-even units are simply the fixed costs divided by this per-unit contribution.
Why must price be greater than variable cost?
If each unit costs more to make than it sells for, every sale deepens the loss and the fixed costs are never recovered — there is no break-even point at all. That is why the calculator flags it.
How do I read the break-even graph?
Two lines climb from left to right: total revenue and total cost. They cross at the break-even point. To the left of the crossing, cost sits above revenue — the loss zone. To the right, revenue pulls ahead — the profit zone.
Where is this used in real life?
Pricing a product — with $10,000 fixed costs and a $15 margin per unit you must sell 667 units to break even. Launch decisions — checking whether the expected sales clear that bar. Cost control — seeing how cutting fixed rent or raising price lowers the units you need before profit begins.