About this calculator
Units = Fixed costs ÷ (Price − Variable cost).
Break-even analysis tells you exactly how many units of a product you need to sell — or how much revenue you need to generate — before your business starts making a profit. This calculator uses the standard formula: Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit).
Fixed costs are expenses that don't change with how much you sell, such as rent, salaries, insurance and software subscriptions. Variable costs are tied directly to each unit sold, such as raw materials, packaging and per-transaction payment fees. The difference between price and variable cost is your contribution margin — the rand amount each sale contributes towards covering fixed costs.
If your contribution margin is zero or negative, you can never break even at the current price; you'll need to either raise prices or cut variable costs. Use the calculator to test scenarios: a small price increase or a small reduction in unit cost can dramatically lower the number of units you need to sell. Once you pass break-even, every additional unit's contribution margin drops straight to profit.
How to use it
- 1Enter your fixed costs. Total fixed expenses for the period (e.g. monthly).
- 2Enter the selling price per unit. What customers pay for one unit.
- 3Enter the variable cost per unit. Direct cost to produce or deliver one unit.
- 4Read the break-even units. The number of units you must sell to cover fixed costs.