Break-Even Calculator
Calculate the break-even point for your business or product: units to sell and revenue needed to cover all costs and achieve target profit
How to Use
- Enter your fixed costs (rent, salaries, subscriptions)
- Enter the selling price per unit
- Enter the variable cost per unit (materials, packaging)
- Enter your target profit (optional)
- Press "Calculate" to see the break-even units and revenue needed
Break-Even Analysis in Business
The break-even point is the sales volume at which total revenue equals total costs — zero profit, zero loss.
Contribution Margin
Contribution Margin = Selling Price – Variable Cost per Unit
It represents the portion of revenue that covers fixed costs and eventually generates profit.
Break-Even Formula
Break-Even Units = Fixed Costs ÷ Contribution Margin
Break-Even Revenue = Break-Even Units × Selling Price
Why Break-Even Analysis Matters
It helps business owners set the right pricing, evaluate product viability, and set minimum sales targets before launching.
Calculation Methodology
Contribution margin
The calculator computes contribution margin = selling price per unit − variable cost per unit. If the margin is zero or negative, a meaningful break-even point cannot be reached.
Break-even point
Break-even units = fixed costs ÷ contribution margin. Break-even revenue = break-even units × selling price.
Target profit
When a target profit is entered, the calculator adds it to fixed costs before dividing by contribution margin.
Practical Examples
Specialty Coffee Shop
Ahmed opened a coffee shop with SAR 15,000/month in fixed costs. Each cup sells for SAR 18 with a variable cost of SAR 6. Contribution margin = 18 - 6 = SAR 12 per cup. Break-even = 15,000 ÷ 12 = 1,250 cups/month. Break-even revenue = 1,250 × 18 = SAR 22,500 — about 42 cups per day to cover costs.
E-Commerce Store with Target Profit
Sara runs an online store with SAR 8,000/month fixed costs. Product price is SAR 95, variable cost SAR 45. Contribution margin = 95 - 45 = SAR 50. Break-even = 8,000 ÷ 50 = 160 units (SAR 15,200 revenue). To hit a SAR 5,000 target profit: (8,000 + 5,000) ÷ 50 = 260 units (SAR 24,700 revenue).
Frequently Asked Questions
What is the difference between fixed and variable costs?
How do I calculate break-even for a service business?
What is a good contribution margin?
How does break-even change with multiple products?
Can break-even analysis include taxes?
What is the margin of safety?
Disclaimer: The results shown are approximate and for reference only, and do not constitute financial or legal advice. Actual amounts may vary based on additional factors. Please consult the relevant official authorities or a licensed financial advisor for accurate information specific to your situation.