How break-even quantity works
Break-even is the point where you neither make nor lose money. To see it in units, start with the contribution margin per unit: the selling price minus the variable cost. That margin is what pays down your fixed costs, so break-even units = fixed costs / contribution margin per unit. Because you cannot sell a fraction of a unit, the result is rounded up - one more unit is what actually clears the line.
Fixed costs stay the same no matter how many units you sell: rent, salaried payroll, depreciation, insurance and base utilities. Variable costs are what one extra sale adds: materials, packaging, shipping, and payment or marketplace fees. Hourly labor that rises with volume is closer to a variable cost, so splitting payroll between the two usually gives a more realistic answer than dumping all of it into fixed.
Enter a target profit and the calculator also shows the volume that clears fixed costs and that profit, by dividing fixed costs plus target profit by the same contribution margin. The sales figures come from the rounded-up unit counts shown above them, so multiplying the units on screen by your price gives the same number.
Written as of September 2026. This is a single-product contribution margin model; it ignores inventory changes, discounts, returns and sales tax. Use it for planning and confirm significant decisions with your accountant.
Frequently asked questions
Salaried staff who get paid the same every month are a fixed cost. Hourly shifts and commissions that scale with sales behave like variable costs, so put that portion in the variable line.
Then every unit sold adds to the loss and no volume reaches break-even. You have to raise the price or cut variable costs such as materials and selling fees before the calculation means anything.