Break-Even Calculator

The contribution margin is the selling price minus the variable cost per unit. It represents how much each unit sold contributes toward covering fixed costs and eventually generating profit. A higher contribution margin means you reach break-even faster.

Increasing the selling price raises the contribution margin and lowers the break-even quantity. Decreasing the price has the opposite effect. This is why pricing strategy is so closely linked to profitability — even small price increases can dramatically reduce the sales volume needed to break even.

Fixed costs include rent, salaries, insurance, and equipment depreciation — they stay the same regardless of production volume. Variable costs include raw materials, packaging, shipping, and sales commissions — they increase proportionally with each additional unit produced or sold.