Break-Even Calculator

Break-even analysis helps business owners determine the minimum sales needed to avoid losses. It separates costs into two categories: fixed costs that do not change with production, and variable costs that scale with each unit sold.

Fixed Costs

Fixed costs remain the same regardless of how many units you produce. Examples include rent, insurance, salaried staff, software subscriptions, and equipment leases. Even if you sell zero units, these expenses still exist.

Variable Costs

Variable costs increase with each unit produced or sold. Examples include raw materials, packaging, shipping, direct labor per unit, and sales commissions tied to volume. The more you sell, the higher your total variable costs become.

Contribution Margin

The contribution margin is the amount each sale contributes toward covering fixed costs. Once fixed costs are fully covered, every additional unit sold generates profit equal to the contribution margin.