How to Calculate Your Business Break-Even Point: Formula, Examples, and Practical Guide

The break-even point is the sales level where total revenue equals total costs, resulting in neither profit nor loss. To calculate it in units, divide fixed costs by the selling price per unit minus the variable cost per unit, known as the contribution margin.

For example, with fixed costs of 10,000, a selling price of 100, and variable costs of 60, the contribution margin is 40 and the break-even point is 250 units. This assumes constant prices and costs. Recalculate when expenses or pricing change. Try Cash Cloud for free to explore sales, expense, and accounting tools.