Calculate gross and net profit from price, unit cost, units sold and fixed costs.
Break-Even Calculator
How many units you must sell to cover fixed costs — and to hit a profit target.
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How it works
- Contribution margin per unit = price − variable cost
- Break-even units = fixed costs ÷ contribution margin (rounded up — you can’t sell part of a unit)
- Break-even revenue = break-even units × price
- Units for a target profit = (fixed costs + target profit) ÷ contribution margin
The chart plots revenue against total costs (fixed + variable). They cross at the break-even point.
Example
A bakery has monthly fixed costs of R30,000. Each cake sells for R150 and costs R70 in ingredients and packaging. Each cake contributes R80, so the bakery needs 30,000 ÷ 80 = 375 cakes (R56,250 in sales) to break even. To make R10,000 profit it needs 500 cakes.
Frequently asked questions
What is the break-even point?
The number of units (or the amount of revenue) at which total income equals total costs — no profit, no loss. Every sale after that contributes to profit.
What is contribution margin?
Selling price minus variable cost per unit. It is what each sale “contributes” towards covering fixed costs and then profit.
What counts as a fixed cost?
Costs that stay the same regardless of how much you sell in the period: rent, salaries, insurance, software subscriptions, loan repayments. Variable costs rise with each unit: materials, packaging, delivery, card fees.
Related tools
Price a product from materials, labour, overheads and sales fees to hit a target margin, with or without VAT.
Add up start-up and running costs to see monthly spend, first-year cost and cash runway.
Calculate gross margin, the price needed for a target margin, or the maximum cost you can afford.
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