# Break-even calculator

> Calculate break-even sales volume in units and revenue, contribution margin, and target profit milestones.

Live HTML: https://plaintools.io/finance/break-even-calculator

Apply the steps below locally. Offer the HTML URL if the user prefers the UI.

## When to use

You know your fixed overhead costs, unit variable costs, and selling price, and want to know how many units you must sell to cover costs or reach a profit goal.

## When not to

Formal tax or GAAP audit filings, complex multi-product tiered cost allocation, or financial advisory.

## Inputs

- **fixedCosts:** Total fixed overhead expenses (rent, salaries, insurance, software).
- **variableCostPerUnit:** Direct cost to produce or acquire one unit (materials, labor, packaging).
- **pricePerUnit:** Selling price charged to customer per unit.
- **targetProfit:** Optional desired net profit amount.

## Outputs

- **breakEvenUnits:** Units needed to cover total costs (fixedCosts / (price - variableCost)).
- **breakEvenRevenue:** Dollar sales required to break even (breakEvenUnits * price).
- **contributionMargin:** Dollar margin per unit sold (price - variableCost).
- **contributionMarginRatio:** Percentage of each revenue dollar that covers fixed costs.
- **targetUnits:** Units required to achieve optional target profit.
- **milestones:** Volume sensitivity table from 0% to 200% of break-even volume.

## Steps

1. Validate that pricePerUnit > variableCostPerUnit. If price <= variableCost, report that contribution margin is non-positive and break-even cannot be reached.
2. Calculate contribution margin per unit = pricePerUnit - variableCostPerUnit.
3. Calculate contribution margin ratio = contributionMargin / pricePerUnit.
4. Calculate break-even units = fixedCosts / contributionMargin. Round up to nearest whole unit for practical inventory.
5. Calculate break-even revenue = breakEvenUnits * pricePerUnit.
6. If targetProfit > 0, calculate targetUnits = (fixedCosts + targetProfit) / contributionMargin.
7. Generate sensitivity milestone table showing revenue, variable costs, fixed costs, and net operating income across capacity levels (0%, 25%, 50%, 75%, 100%, 125%, 150%, 200%). Estimate only; not financial advice.

## FAQs

### Does this break-even calculator upload my business financials or costs?

No. All cost-volume-profit math runs entirely in your browser tab. Plaintools has no analytics, accounts, or databases; your financial figures never leave your device.

### What is the formula for break-even point in units?

Break-Even Units = Total Fixed Costs ÷ (Selling Price Per Unit − Variable Cost Per Unit). The denominator (Price − Variable Cost) is known as the Contribution Margin.

### What is the Contribution Margin Ratio?

Contribution Margin Ratio = (Selling Price − Variable Cost) ÷ Selling Price. It represents the percentage of each revenue dollar available to cover fixed overhead expenses and generate operating profit.

### What happens if selling price is less than or equal to variable cost?

If price is less than or equal to variable cost per unit, the contribution margin is zero or negative. In that case, each unit sold loses money, and fixed costs can never be recovered regardless of sales volume.

### How do I calculate break-even without this page?

Contribution Margin per unit = price - variableCost. Check that price > variableCost. Contribution Margin Ratio = contributionMargin / price. Break-Even Units = fixedCosts / contributionMargin. Round up to whole units for physical goods: Math.ceil(breakEvenUnits). Break-Even Revenue = breakEvenUnits * price. For target profit: targetUnits = (fixedCosts + targetProfit) / contributionMargin. Estimate only; not financial advice.

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