Find your break-even point from fixed and variable costs, or check gross margin and markup from cost and selling price.
The break-even unit count only means something within one business — 334 units means nothing without knowing what's being sold. The contribution margin ratio shown alongside it — 60% on this page's own default — is what actually compares across completely different businesses and price points, since it's already expressed as a percentage of revenue rather than a count of physical units. A software subscription and a bakery can be compared on this number even though "a unit" means something totally different for each.
This page's margin/markup panel goes one way only — cost and selling price in, margin and markup out. To go the other direction — start from a target margin or markup and solve for the price that achieves it — the standalone Margin Calculator supports that reverse mode directly, useful when a target margin is fixed by company policy and the selling price is what's actually being decided.
Break-even math treats price as a lever with no effect on how many units sell, which is never quite true — raise the price and the contribution margin per unit improves, but some buyers walk away, and the calculator has no way to know how many. A lower break-even volume from a price cut is only good news if the resulting sales volume actually clears it; that demand response is a market-research question this calculator, like most break-even tools, deliberately leaves outside its scope. Financing the fixed costs behind that break-even number in the first place is a separate question the Business Loan Calculator prices directly, and once a pricing decision has actually run its course, the ROI Calculator measures whether it paid off against real results rather than a projection.
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit). The denominator — price minus variable cost — is the contribution margin: how much each sale contributes toward covering fixed costs after its own variable cost is paid. Break-even revenue is just break-even units × price per unit.
Fixed costs don't change with how many units you sell — rent, salaries, insurance, software subscriptions. Variable costs scale with each unit sold — materials, per-unit shipping, payment processing fees, sales commissions. The same expense can be fixed or variable depending on the business: a salaried support rep is a fixed cost, a commission-only sales rep is a variable one.
Both compare profit to cost, but against a different base: gross margin = profit ÷ selling price, while markup = profit ÷ cost price. A 50% markup on a $100 cost gives a $150 selling price ($50 profit ÷ $100 cost), but that's only a 33% gross margin ($50 profit ÷ $150 selling price) — the two numbers are never equal except at 0%, and mixing them up is a common pricing mistake that leads to underpricing.
If the variable cost of making one more unit exceeds what you sell it for, every additional sale loses money — there's no volume of sales that recovers fixed costs, since the gap widens with every unit sold rather than narrowing. Fixed costs would need to be cut, price would need to rise, or variable cost would need to fall before a break-even point exists at all — the calculator flags this case rather than showing a misleading number.
It's a planning tool as much as a diagnostic one — before launching a product, break-even volume tells you whether the required sales are realistic for your market size. It's also useful for pricing decisions: raising price per unit lowers the break-even volume needed, which is often an easier lever to pull than cutting fixed costs.
Worked example: with $10,000 in fixed costs, a $50 price per unit, and $20 variable cost per unit, the contribution margin is $30/unit (60% of price), so break-even is 10,000 ÷ 30 ≈ 333.33 units — 334 in practice, since a fraction of a unit cannot be sold — or $16,666.67 in revenue at the exact break-even point. Separately, an item costing $60 sold for $90 has a $30 gross profit — a 33.3% gross margin but a 50% markup on cost.
Break-even in units says nothing about timing; if the payback runs over several years, discount it with the present value calculator to see what those later years are worth today.