Unit Contribution Break-Even Calculator
Work out how many units you must sell to cover fixed costs, using contribution margin per unit — price minus variable cost.
How it works
Contribution per unit = price − variable cost · Break-even units = fixed costs ÷ contribution per unit
Contribution margin is the slice of each sale left after variable costs — the money that first pays down fixed costs and then becomes profit. Dividing total fixed costs by this per-unit contribution gives the exact volume where you stop losing money. Anything sold beyond that point drops the full contribution straight to the bottom line.
Worked example
A product priced at $50 with $30 of variable cost contributes $20 per unit. To cover $10,000 of fixed costs you need 10,000 ÷ 20 = 500 units, which at $50 each is $25,000 of break-even revenue. Unit 501 adds a clean $20 of profit.
Frequently asked questions
What counts as a variable cost?
Variable costs rise and fall with each unit sold — materials, packaging, payment fees, per-order shipping. Fixed costs such as rent and salaries stay the same whether you sell one unit or a thousand.
Why round break-even units up?
You cannot sell a fraction of a unit and still cover costs, so the calculator rounds up. Selling the exact fractional figure would leave a few dollars of fixed cost unrecovered.
How does the contribution margin ratio help?
The ratio (contribution ÷ price) tells you what share of every revenue dollar is available for fixed costs and profit. Multiply your fixed costs by 1 ÷ ratio to get break-even revenue directly.
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Educational estimate, not financial advice.