How to calculate a break-even point in units (with an example)

How to · Updated 2026-11-10

Divide your fixed costs by what each sale leaves after its own costs. A worked example for a small candle stall, with a profit target and a price change.

Your break-even point in units is your fixed costs divided by the money each sale leaves once its own costs are paid (price minus variable cost per unit), rounded up to a whole unit. The break-even calculator does the division, draws where sales meet costs and shows what a price change would do. To turn margins and discounts into prices first, the percentage calculator helps.

What you need

• Fixed costs for one period, usually a month: rent or a stall fee, insurance, software, any wages that do not change with sales.
• Your selling price for one unit, before any sales tax you collect for the government.
• Variable cost per unit: what one more sale costs you, such as materials, packaging, postage and the card fee. If you buy supplies in different pack sizes, the unit price tool gives the cost per gram or per item to build this number.
• Optional: a profit you want for the same period.

Keep everything in the same period and currency. Mixing a yearly rent with a monthly sales plan is the most common slip.

Step by step

Three formulas carry the whole idea:

Contribution per unit = price − variable cost per unit

Break-even units = fixed costs ÷ contribution per unit (round up)

Units for a profit = (fixed costs + profit you want) ÷ contribution per unit (round up)

“Contribution” is just what each sale contributes towards the fixed bills. Once those are covered, the same amount per sale becomes profit.

With the tool:

1. Open break-even and choose your currency.
2. Enter Fixed costs, Selling price per unit and Variable cost per unit.
3. If you have a goal, type it in Profit you want. Leave it at 0 to skip.
4. Read the four boxes: break-even units, break-even sales, profit per unit and units for your target. The chart plots sales against total costs and marks where the lines cross.
5. Type a percentage in What if the price changes by (a minus sign for a cut) to see the new break-even point below the chart.

If the price is not above the variable cost, the tool stops and tells you, because no number of sales can ever catch up.

A worked example

Priya plans to sell hand-poured candles at a weekend market.

• Fixed costs a month: stall fee, public liability insurance and a small website plan, 1,800 in total.
• Price: 24 a candle.
• Variable cost: wax, wick, jar, label and the card fee come to 9 a candle.

Contribution per candle = 24 − 9 = 15.

Break-even = 1,800 ÷ 15 = 120 candles a month, which is 120 × 24 = 2,880 in sales.

She would like 1,200 a month for herself on top: (1,800 + 1,200) ÷ 15 = 3,000 ÷ 15 = 200 candles.

Now the what-if. A 10% discount drops the price to 21.60 and the contribution to 12.60. Break-even becomes 1,800 ÷ 12.60 = 142.86, rounded up to 143 candles. A 10% cut in price needs about 19% more sales just to stand still. Going the other way, a 10% rise to 26.40 brings break-even down to 104 candles.

With four market days a month, 120 candles means 30 a day. That is the real question for Priya: can one stall sell 30 candles on a Saturday?

Check your answer

• Use the margin ratio. Contribution ÷ price is 15 ÷ 24 = 0.625, or 62.5%. Fixed costs ÷ 0.625 = 1,800 ÷ 0.625 = 2,880, the same break-even sales figure from a different route.
• Profit at break-even is zero. 120 × 24 = 2,880 in sales; costs are 1,800 + 120 × 9 = 2,880. They match.
• One unit past break-even earns one contribution. At 121 candles, profit should be 15. If your sheet shows anything else, a cost is in the wrong box.

Questions people ask

Is break-even the same as payback? No. Break-even is about covering running costs in a period. Payback asks how long it takes to earn back a one-off purchase, such as an oven or a van. You can fold a purchase in by spreading it over its life and adding that share to fixed costs.

What if I sell several products? Work out a blended contribution: the average contribution per sale, weighted by how many of each you expect to sell. Then divide fixed costs by that. It is only as good as your sales mix guess.

Should I count my own pay as a fixed cost? You can. If you put a wage for yourself into fixed costs, break-even means “I am paid and the business covers itself”. If you leave it out, use the profit box for it instead. Either way, these are planning numbers, not financial advice.