Break-even Pricing Calculator
Compute contribution margin, break-even units, and profit at a given volume based on price and variable costs.
Break-even pricing connects pricing and cost structure to the volume required to cover fixed costs. It's the simplest way to sanity-check whether a product can be viable at expected demand levels.
This calculator computes contribution margin, break-even units, break-even revenue, and profit at a chosen unit volume.
Prefer an explanation- Read the guide.
Break-even pricing: contribution margin, break-even units, and profitBreak-even revenue: calculate your break-even pointCash runway: how to estimate burn, break-even, and survival timeDCF valuation: forecast cash flows, discount rate, and terminal value
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
769.2
- Price per unit
- $100
- Variable cost per unit
- $35
- Fixed costs (for the period)
- $50,000
- Units sold (expected)
- 1,200
How to calculate
- Enter your price per unit and variable cost per unit.
- Enter fixed costs for the period (monthly or annual, but keep units consistent).
- Enter expected units sold to see profit at that volume.
Formula
Contribution per unit = price - variable cost; Break-even units = fixed costs / contribution per unit; Profit = units * contribution - fixed costs
- Variable cost per unit is constant across volume.
- Fixed costs are fixed for the chosen period.
- Ignores step-functions and capacity constraints (which can change fixed costs).
FAQ
Is break-even the same as profitability-
Break-even is the point where profit is exactly zero. Profitability means you are above break-even (positive profit) and ideally have margin to absorb uncertainty and fund growth.
Should marketing spend be fixed or variable-
It depends on your model. Some marketing scales with volume (variable) and some is budgeted as fixed for a period. For break-even analysis, use the classification that matches how your costs actually behave.
Common mistakes
- Mixing time windows (monthly fixed costs with annual volume).
- Forgetting variable costs like payment fees, shipping, or support costs that scale with units.
- Using break-even as the only goal; you still need margin for growth and risk.
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Quick checks
- Use consistent time units (monthly vs annual) when entering rates and cash flows.
- Run a sensitivity check on the input that drives the result most (often discount rate or growth).
- Treat the output as a decision aid, not a prediction; validate assumptions with reality.