Costing calculator
Break-Even Quantity Calculator
Find the sales volume where fixed and variable costs are covered, and what the planned volume adds. Enter your costs, price and target volume; the rows show contribution, break-even revenue and the margin of safety.
What this calculator does
- Break-even units, contribution margin, revenue and profit at target volume, checked against your planned volume.
Formula used
- Contribution margin = selling price − variable cost per unit
- Break-even units = fixed cost ÷ contribution margin
- Break-even revenue = break-even units × selling price
- Profit at target volume = contribution margin × target volume − fixed cost
- Margin of safety = (target volume − break-even units) ÷ target volume × 100
Inputs explained
- Fixed Cost: Budgeted fixed cost for the period: rent, salaries and depreciation.
- Variable Cost per Unit: Material, direct labor and variable overhead per unit from costing.
- Selling Price per Unit: Quoted or list price per unit before any discount.
- Target Volume: Planned sales volume for the period, from the forecast.
How to use the result
- Best suited to sizing a new product launch, testing a price cut or cost reduction, setting a sales quota floor.
- Volume discounts, learning curves and step fixed costs fall outside the straight-line model. One product at one price; a mixed portfolio needs a weighted-average contribution.
Current U.S. benchmarks
- U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).
Common questions
- What counts as contribution margin? Selling price minus variable cost per unit. It is what each sale leaves toward fixed cost and profit. Material, direct labor and variable overhead belong in variable cost; rent, salaries and depreciation are fixed.
- Why is profit at target volume negative? Because the target volume sits below break-even, so contribution does not cover fixed cost. Either raise volume, lift contribution per unit or remove fixed cost.
- How do I lower the break-even point? Lift contribution per unit or cut fixed cost. Raising price adds contribution directly; cutting fixed cost lowers the hurdle. Test demand before a price change and confirm the cost cut is permanent.
- Does break-even include taxes? No. It covers operating costs at the contribution level, before interest and tax. For a target net profit, add that profit to fixed cost and divide by contribution per unit.
Related guides
Last reviewed 2026-10-01.