Break-Even Units Calculator
Break-even units = fixed costs ÷ contribution margin
Enter your price, variable cost, and fixed costs.
TL;DR Break-even units = fixed costs ÷ (price − variable cost) A product selling for $25 with $10 of variable cost contributes $15 per unit, a 60% contribution margin. Against $120,000 of fixed costs it breaks even at 8,000 units, or $200,000 of revenue. Many consumer brands aim for a contribution margin of 40% or more.
Break-even units
8,000
Break-even revenue
$200,000
The formula
Contribution margin = price − variable cost · Break-even units = fixed costs ÷ contribution margin
Worked example
A brand sells a unit for $25 with $10 of variable cost, so the contribution margin is $25 − $10 = $15 per unit (60% of price). With $120,000 of fixed costs, break-even units = $120,000 ÷ $15 = 8,000 units, and break-even revenue = 8,000 × $25 = $200,000. Every unit beyond 8,000 adds $15 of profit.
Units to break even at different margins (indicative)
| Contribution margin | Per $100K of fixed cost | Per $250K of fixed cost |
|---|---|---|
| $5 per unit | 20,000 units | 50,000 units |
| $10 per unit | 10,000 units | 25,000 units |
| $15 per unit | 6,667 units | 16,667 units |
| $25 per unit | 4,000 units | 10,000 units |
Figures assume a single product and constant per-unit economics. For preliminary planning only; not an offer of credit.
Frequently asked questions
How do you calculate break-even units?
Break-even units = fixed costs ÷ contribution margin per unit, where contribution margin = price − variable cost. A product selling for $25 with $10 of variable cost contributes $15 per unit; $120,000 of fixed costs ÷ $15 = 8,000 units to break even.
What is contribution margin?
Contribution margin is the amount each unit sold contributes toward fixed costs after covering its own variable cost: price − variable cost. As a percentage it is (price − variable cost) ÷ price. In the example above the contribution margin is $15 per unit, or 60%.
What counts as a variable cost versus a fixed cost?
Variable costs scale with each unit — COGS, freight, per-unit fulfillment, sales commissions, and payment fees. Fixed costs stay flat regardless of volume — salaries, rent, software, and marketing retainers. Only per-unit variable costs go into the contribution margin.
What is a good contribution margin for a consumer brand?
It varies by channel, but many consumer brands target a contribution margin of 40% or more so that volume growth quickly covers fixed overhead. Thin contribution margins mean you need far more units to break even, which ties up working capital in inventory.