Break-even calculator
FinanceNo. 08 / 84
Fixed costs, price and variable cost per unit — get the contribution margin and the number of sales before you stop losing money.
the exact point where the spreadsheet stops frowning.
work surface
Math, not advice — results are indicative.Read the disclaimer.
most-used utilities
Coffee cart
Monthly pitch fee, beans and cups per cup — find out how many flat whites pay the rent.
Handmade candles
Stall fee, wax and jars, with a price that still leaves room for a profit.
Online course
Hosting and software against a one-time price, and how many students cover the platform.
pro tips
Count every fixed cost, including the dull ones: insurance, software, accounting, the card reader. Undercounting is how break-even arrives a quarter late.
Recalculate when a supplier changes prices. A dollar more per unit moves the line further than it looks, and the old number keeps smiling.
Treat break-even as a floor, not a target. Everything sold after that point is the part of the spreadsheet you actually enjoy.
what it does
Enter three numbers: what you pay whether you sell anything or not, what you charge per unit, and what each unit costs you to make or buy. The widget returns the contribution margin, the margin as a percentage, and the number of units that finally covers the fixed costs.
It fits the small operations best: a coffee cart with monthly rent, a candle maker with a stall fee, a course with software subscriptions, a shop testing a new product line. Anywhere the rent arrives before the customers do.
Say fixed costs are $4,000 a month, the price is $25 and the variable cost is $10. Each sale contributes $15, which is 60% of the price. Divide the $4,000 by $15 and you need 266.7 units, so 267 sales at $25 bring in $6,675 before the month turns a profit.
The widget rounds units up, because half a candle does not sell. It also warns when the margin is zero or negative: at that point more sales cannot rescue the business, and the only fixes are a higher price or a lower variable cost. Taxes, discounts and bulk deals are not in the model.
quick answers
What is contribution margin?
The price of one unit minus its variable cost. It is the money each sale leaves behind to pay fixed costs, before anything becomes profit.
What if the contribution margin is negative?
Every sale then adds to the loss, so selling more only makes the problem bigger. The widget warns you and shows the per-unit math — raise the price or cut the variable cost first.
Why are break-even units rounded up?
Because you cannot sell 0.7 of a unit. The exact figure marks the line; the rounded figure is the first whole sale that crosses it, and the revenue shown matches that count.