How do you calculate break-even quantity?

Divide total fixed cost by the contribution margin per unit (price minus variable cost). With $18,000 fixed, a $21.00 price, and $12.50 variable cost, the margin is $8.50 and break-even is 18,000 / 8.50 = about 2,118 units.

What is contribution margin?

It is selling price minus variable cost per unit — the cash each unit contributes toward fixed costs and profit. Here it is $21.00 - $12.50 = $8.50 per unit.

What is break-even revenue?

It is the break-even quantity multiplied by price, or about 2,118 units x $21.00 = roughly $44,471. Below that revenue the job loses money; above it, every unit's $8.50 margin becomes profit.

How much profit do I make at my target volume?

Profit equals volume x contribution margin minus fixed cost. At 3,000 units that is 3,000 x $8.50 - $18,000 = $7,500.

What is a good break-even quantity?

There is no universal number; it should sit comfortably below your realistic sales or order volume. A break-even of 2,118 against a 3,000-unit target gives a healthy margin of safety of about 29%.

How does raising price affect break-even?

A higher price widens the contribution margin and lowers break-even fast. Raising price by $1 to $22.00 lifts margin to $9.50 and drops break-even to about 1,895 units.

Costing calculator

Break-Even Quantity Calculator

Break-even quantity is the number of units you must produce and sell before a job, product line, or capital purchase stops losing money and starts making it. Estimators, plant managers, and owners use it to size minimum order quantities, justify new equipment, and decide whether a quote is worth taking. The lever underneath it is contribution margin — what each unit adds toward fixed costs after its own variable cost is paid. Knowing your break-even point turns 'can we make money on this?' from a gut call into a number.

What this calculator does

Find how many units must sell to cover fixed and variable costs.
Use before launching a product, tool, or quoted program.
It computes how many units cover total fixed cost given the per-unit contribution margin, plus the revenue at that point and the profit at your planned volume.

Formula used

Contribution margin = price − variable cost
Break-even units = fixed cost ÷ contribution margin
Profit = volume × contribution margin − fixed cost

Inputs explained

Fixed cost: undefined
Variable cost per unit: undefined
Selling price per unit: undefined
Target volume: undefined

How to use the result

Use it when evaluating a new product, a tooling or machine investment, or a quote where you need a clear floor volume.
It assumes a single price and constant per-unit variable cost; volume discounts, scrap creep, or a product mix break the straight-line model.

Current U.S. benchmarks

U.S. manufacturing runs at 75.6% of capacity (Federal Reserve, May 2026). New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate break-even quantity? Divide total fixed cost by the contribution margin per unit (price minus variable cost). With $18,000 fixed, a $21.00 price, and $12.50 variable cost, the margin is $8.50 and break-even is 18,000 / 8.50 = about 2,118 units.
What is contribution margin? It is selling price minus variable cost per unit — the cash each unit contributes toward fixed costs and profit. Here it is $21.00 - $12.50 = $8.50 per unit.
What is break-even revenue? It is the break-even quantity multiplied by price, or about 2,118 units x $21.00 = roughly $44,471. Below that revenue the job loses money; above it, every unit's $8.50 margin becomes profit.
How much profit do I make at my target volume? Profit equals volume x contribution margin minus fixed cost. At 3,000 units that is 3,000 x $8.50 - $18,000 = $7,500.
What is a good break-even quantity? There is no universal number; it should sit comfortably below your realistic sales or order volume. A break-even of 2,118 against a 3,000-unit target gives a healthy margin of safety of about 29%.

Last reviewed 2026-05-12.