Accounting Break-Even Point Calculator Examples
See worked break-even examples for products, services, subscriptions, and target-profit planning.
These examples show how fixed costs, selling price, and variable cost per unit combine to produce a break-even sales volume and revenue estimate. All figures are illustrative and use one consistent accounting period per scenario.
Handmade product business with a standard break-even goal
A maker has monthly fixed costs of $6,000, sells each item for $40, and has a $16 variable cost per item.
Input Summary
Fixed costs
$6,000 per month
Selling price
$40 per item
Variable cost
$16 per item
Target profit
$0
Calculation Breakdown
- 1Contribution margin per item$40 - $16$24
- 2Break-even units$6,000 / $24250 items
- 3Break-even revenue250 * $40$10,000
Result Summary
Break-even revenue
$10,000
Accounting Break-Even Point Calculator
Break-even is 250 items and $10,000 in monthly revenue.
Consulting service with a monthly profit target
Monthly fixed costs are $3,000. The average project is sold for $1,200, has $300 in direct subcontractor and delivery costs, and the profit target is $6,000.
Input Summary
Fixed costs
$3,000 per month
Selling price
$1,200 per project
Variable cost
$300 per project
Target profit
$6,000 per month
Calculation Breakdown
- 1Contribution margin per project$1,200 - $300$900
- 2Break-even projects$3,000 / $9003.33 projects
- 3Projects for target profit($3,000 + $6,000) / $90010 projects
- 4Revenue for target profit10 * $1,200$12,000
Result Summary
Revenue for target profit
$12,000
Accounting Break-Even Point Calculator
The consultant needs 4 projects to fully cover costs and 10 projects to reach the $6,000 monthly target profit.
Subscription business with a low contribution margin
A business has $20,000 in fixed quarterly costs, charges $25 per subscriber per month, and incurs $10 per subscriber per month in variable costs. The period is treated as one month for all inputs, so fixed costs are allocated as $6,666.67 per month.
Input Summary
Fixed costs
$6,666.67 per month
Selling price
$25 per subscriber per month
Variable cost
$10 per subscriber per month
Target profit
$0
Calculation Breakdown
- 1Contribution margin per subscriber$25 - $10$15
- 2Contribution margin ratio$15 / $2560%
- 3Break-even subscribers$6,666.67 / $15444.45 subscribers
- 4Break-even revenue445 * $25$11,125 per month
Result Summary
Break-even revenue
$11,125 per month
Accounting Break-Even Point Calculator
The business needs about 445 active monthly subscribers and $11,125 in monthly revenue to cover the allocated fixed costs.
How to Read Your Results
Break-even units show the estimated sales volume at which total revenue equals total fixed and variable costs.
Break-even revenue translates the unit target into sales value at the stated average selling price.
Contribution margin per unit shows the amount each sale provides to cover fixed costs before it creates profit.
A contribution margin ratio helps compare offers with different selling prices.
Units for target profit include both fixed-cost recovery and the selected profit goal.
For indivisible items, round calculated sales volume up to the next whole unit.
Assumptions & Important Notes
- Each scenario uses a single consistent period for fixed costs, prices, variable costs, and profit targets.
- The selling price represents an average realized price before sales taxes where applicable.
- Variable cost is assumed to increase proportionally with each additional unit.
- The examples do not allow for discounts, refunds, capacity changes, or changes in cost at higher volume.
Related Examples
Frequently Asked Questions
Can I use break-even examples for a service business?
Yes. Define a unit as a project, billable hour, appointment, customer engagement, or another repeatable service measure.
Why does a target-profit example need more units than break-even?
Break-even only covers fixed costs. A target-profit calculation adds the desired profit amount to those costs.
Can break-even revenue be lower than fixed costs?
No, not when variable costs are positive. Revenue must cover fixed costs plus the variable costs attached to the sales needed.
What if my calculated result includes part of a unit?
The formula can produce a fraction, but planning normally requires rounding up if a customer cannot buy a fraction of the unit.
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Use the live calculator with your own inputs, timing, and preferences.