Break-Even Calculator

How it works

Works out how many sales per month cover your fixed costs, how many you need to hit a target profit, and how much cushion your current sales give you.

1. Fixed costs = the six monthly lines added together: rent / facility, salaried payroll, software, insurance and professional fees, marketing, and utilities or other.
2. Contribution margin = Sale price per unit − Variable cost per unit. CM % = contribution margin ÷ sale price.
3. Break-even units = Fixed costs ÷ contribution margin, rounded up to a whole unit. Break-even revenue = those units × Sale price per unit.
4. Units for target profit = (Fixed costs + Target profit) ÷ contribution margin, rounded up. Margin of safety = (Current actual sales − break-even units) ÷ Current actual sales.
5. If the sale price is not above the variable cost, the contribution margin is zero or less, there is no break-even, and the tool shows ∞.

Questions

What counts as a variable cost?

A cost that rises with each sale, such as materials, packaging, payment fees, sales commission, or subcontractor labor for that job. Rent, salaried payroll and other costs that do not change with sales go in the fixed cost boxes.

What do the What-if rows show?

Each row changes one thing by 10%: price up, variable cost down, fixed cost down, or units sold up. The rest stays the same. The row shows how much your monthly profit at current sales would change.

What does a negative margin of safety mean?

Your current sales are below the break-even point. The formula is (current sales − break-even units) ÷ current sales, so a number below zero means you are selling fewer units than you need to cover your costs.