Free tool Break-even calculator and formula: units, revenue, margin of safety
The break-even point is where revenue covers every cost and profit is zero. Enter your fixed costs, the price per unit and the variable cost per unit to get the units and revenue you need, then add an expected volume and a profit goal to see how far above or below it you are.
- Units and revenue
- Profit at every volume
- Runs locally
Find your break-even point
Use the same period for fixed costs, expected volume and target profit — usually a month. Expected volume and target profit are optional.
Costs that do not change with volume: rent, salaries, software, insurance.
What a customer pays for one unit, without VAT or sales tax.
Costs that come with each unit: goods, packaging, shipping, payment and marketplace fees.
Optional. Your forecast for the period, for margin of safety and profit.
Optional. The profit you want for the period.
Break-even units
400
Fixed costs ÷ (price − variable cost), rounded up to a whole unit.
Profit by volume
Revenue and total cost at different volumes. The lines cross at the break-even point.
| Units | Revenue | Total cost | Profit | |
|---|---|---|---|---|
| 0 | $0 | $12,000 | −$12,000 | — |
| 100 | $5,000 | $14,000 | −$9,000 | — |
| 200 | $10,000 | $16,000 | −$6,000 | — |
| 300 | $15,000 | $18,000 | −$3,000 | — |
| 400 | $20,000 | $20,000 | $0 | Break-even |
| 500 | $25,000 | $22,000 | $3,000 | — |
| 600 | $30,000 | $24,000 | $6,000 | Expected |
| 700 | $35,000 | $26,000 | $9,000 | Target |
| 800 | $40,000 | $28,000 | $12,000 | — |
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https://tapcub.com/tools/break-even-calculator
Version v1.0Updated Update history
What the break-even numbers tell you
All of them come from one quantity: how much each sale contributes after its own variable cost.
Break-even units and revenue
In the example each unit contributes $30, so 400 units cover $12,000 of fixed costs. At $50 each that is $20,000 of revenue. Every unit beyond 400 adds $30 of profit.
Contribution margin ratio
60% means 60 cents of every revenue dollar goes toward fixed costs and profit. Break-even revenue is fixed costs ÷ this ratio, which works even when you sell many products at different prices.
Margin of safety
With 600 expected units, sales can fall by 200 units — 33.3% — before the month turns into a loss. A thin margin of safety means a slow week or a stock-out wipes out profit.
Units for the target profit
A target profit is just another fixed cost to cover: ($12,000 + $9,000) ÷ $30 = 700 units, or $35,000 of revenue.
Break-even analysis assumes a constant price and variable cost per unit and that fixed costs stay fixed within the range. Large discounts, volume pricing from suppliers or hiring another person break those assumptions — recalculate for each scenario.
Set it up in three steps
The hardest part is sorting costs into fixed and variable.
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1
Split your costs
Fixed: rent, salaries, software, insurance. Variable: goods, packaging, shipping, card and marketplace fees per unit. Ad spend can go in either — be consistent.
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2
Enter one period
Use monthly fixed costs with a monthly forecast and target. For several products, use an average price and variable cost weighted by your sales mix.
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3
Test scenarios
Change the price, a supplier cost or rent and watch break-even move. The table below the calculator shows profit at each volume.
Break-even point formulas
Contribution margin per unit is the core of the analysis. In OpenStax's managerial accounting textbook example, a $100 product with $20 variable cost and $18,000 monthly fixed costs breaks even at 225 units, or $22,500.
- Break-even units = fixed costs ÷ (price − variable cost per unit)
- Break-even revenue = fixed costs ÷ contribution margin ratio
- Margin of safety = (expected sales − break-even sales) ÷ expected sales
- Units for a target profit = (fixed costs + target profit) ÷ contribution margin per unit
Contribution margin
price − variable cost per unit
$50 − $20 = $30 (60%)
Break-even units
fixed costs ÷ contribution margin
$12,000 ÷ $30 = 400 units
Break-even revenue
fixed costs ÷ contribution margin ratio
$12,000 ÷ 0.60 = $20,000
Margin of safety
(expected − break-even) ÷ expected
(600 − 400) ÷ 600 = 33.3%
Target profit units
(fixed costs + target profit) ÷ contribution margin
($12,000 + $9,000) ÷ $30 = 700 units
Which lever moves break-even most?
The example business ($12,000 fixed, $50 price, $20 variable cost) with one input changed at a time.
| Scenario | Contribution margin | Break-even units | Change |
|---|---|---|---|
| Baseline | $30 | 400 | — |
| Price +10% ($55) | $35 | 343 | −14% |
| Price −10% ($45) | $25 | 480 | +20% |
| Variable cost −$5 ($15) | $35 | 343 | −14% |
| Fixed costs +$3,000 | $30 | 500 | +25% |
A 10% discount lifts break-even by 20%, because the whole $5 comes out of the $30 contribution. Discounts hurt more than equal price rises help.
Where break-even analysis goes wrong
The formula is simple; the inputs are where it fails.
Leaving fees out of variable cost
Shipping, packaging, card fees and marketplace commission scale with every order. Leave them out and break-even looks lower than it is.
Mixing periods
Annual rent with a monthly forecast gives nonsense. Put fixed costs, volume and target profit on the same period.
Using list price
Use the average price actually paid, after discounts and coupons, not the price on the tag.
Ignoring the product mix
With several products, break-even depends on what sells. Use a weighted average or the contribution margin ratio.
Track the volume side every day
Break-even is a target in units and revenue. TapCub shows the orders and revenue against it from your purchase events.
Orders, GMV and AOV
The ecommerce template computes GMV, orders, average order value and refund rate from purchase and refund events.
Learn moreGoals and alerts
Set a monthly goal on any metric — orders or GMV at break-even, say. The board shows progress and a forecast at the current pace, and alerts when the forecast falls short.
Learn moreChannel return after cost
Import ad spend so acquisition cost per order is measured, not guessed.
Learn moreBreak-even FAQ
Still have a question?
Chat with the team behind TapCub — we usually reply within a few hours on business days.
How do you calculate the break-even point?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With $12,000 of monthly fixed costs, a $50 price and $20 variable cost, you break even at 400 units a month.
How do I calculate break-even revenue?
Divide fixed costs by the contribution margin ratio, (price − variable cost) ÷ price. $12,000 ÷ 60% = $20,000. This works for a mix of products if you use the blended ratio.
What is contribution margin?
Price minus variable cost per unit: what each sale contributes toward fixed costs and then profit. It differs from gross margin, which subtracts only the cost of goods, not every variable cost.
What is the margin of safety?
How far sales can fall before you make a loss: (expected sales − break-even sales) ÷ expected sales. 33% means sales could drop by a third and you would still break even.
What if price is lower than variable cost?
Then there is no break-even point: each extra sale loses money, so more volume makes it worse. Raise the price, cut the variable cost or stop selling that product.
Should ad spend be a fixed or variable cost?
If you pay a roughly fixed budget, treat it as fixed. If you pay per order — affiliates, cost per acquisition — treat it as variable. Use the CAC payback calculator when acquisition is earned back over several orders.
Update history
New features, fixes and data refreshes for this tool, newest first.
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· v1.0
LaunchedFirst release.
Missing something or found an error? Tell us — requests that come up often go into the next update. All tool updates
Plan the volume you need
Once you know how many orders you need, work back to the traffic and the ad budget that deliver them.