Accounting Break-Even Point (Per-Unit) Calculator
Calculate the number of units and sales revenue needed to cover fixed and variable business costs.
Overview
This accounting break-even point calculator estimates how many units you need to sell before sales revenue covers your fixed costs. Enter your fixed costs, selling price per unit, variable cost per unit, and an optional profit target to assess the sales volume required.
How it works
The calculator first subtracts variable cost per unit from selling price per unit to find the contribution margin. It then divides fixed costs by that contribution margin to calculate the number of units needed to break even. Because partial units cannot usually be sold, the result is rounded up to the next whole unit. Break-even revenue equals the rounded unit requirement multiplied by the selling price.
How to use this calculator
- 1Enter the fixed costs for the period you want to assess.
- 2Enter the average selling price for one unit.
- 3Add the variable cost directly associated with each unit sold.
- 4Enter a target profit if you want to plan beyond break-even.
- 5Review the break-even units, revenue, and contribution margin.
Example Calculation
Total Fixed Costs
$10,000
Selling Price per Unit
$50
Variable Cost per Unit
$30
Target Profit
$5,000
Break-Even Units
500 units
With fixed costs of $10,000, a $50 selling price, and a $30 variable cost, the contribution margin is $20 per unit. The business needs to sell 500 units to break even, or 750 units to reach a $5,000 profit target.
Frequently asked questions
What is a break-even point in units?
It is the number of units a business needs to sell for total sales revenue to equal total fixed and variable costs. At this point, profit is zero.
How is break-even point per unit calculated?
Fixed costs are divided by contribution margin per unit. Contribution margin per unit is the selling price minus the variable cost per unit.
What is contribution margin per unit?
It is the amount left from each unit sale after its variable costs are paid. This amount contributes toward fixed costs and then profit.
Why does the calculator round break-even units up?
Businesses generally need to sell whole units. Rounding up ensures the estimated sales volume fully covers fixed costs rather than falling slightly short.
What happens if variable cost is higher than selling price?
Each sale would create a loss before fixed costs, so selling more units would not produce a conventional break-even point. Review the price, variable costs, or product mix.
Does break-even revenue include tax?
The calculator uses the sales price you enter. For a clearer operating view, businesses commonly use prices and costs excluding sales taxes that are collected on behalf of tax authorities.
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Assumptions and warnings
Assumptions
- Fixed costs apply to the same period as the sales figures being considered.
- The selling price and variable cost are average amounts that remain constant for each unit.
- All units produced are assumed to be sold.
- The calculation excludes taxes, financing costs, changes in inventory, and other costs not included in the inputs.
- Results are estimates and should be reviewed when prices, costs, or sales mix change.
Warnings
- This calculator provides an estimate only and is not financial or accounting advice.
- A break-even point cannot be calculated if the variable cost per unit is equal to or greater than the selling price per unit.