What is contribution margin?

The amount each unit contributes toward fixed costs and profit after covering its own variable cost: price minus variable cost per unit.

What is the contribution margin ratio?

Contribution margin divided by price, expressed as a percentage. It shows what portion of each sale is available to cover fixed costs and profit.

What happens after the break-even point?

Every unit sold beyond break-even adds its full contribution margin straight to profit, since fixed costs are already covered.

How can I lower my break-even point?

Reduce fixed costs, raise your price, or cut variable cost per unit — each increases contribution margin or reduces the costs you must cover.

Break-even Units Calculator

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the break-even units calculator?

In short

Break-even units tell you how many units you must sell to cover fixed costs: fixed costs ÷ contribution margin per unit. With $50,000 fixed costs, a $40 price, and $15 variable cost, the $25 contribution margin means you break even at 2,000 units ($80,000 in revenue).

Calculates the number of units (and revenue) you must sell to cover all costs, using contribution margin per unit.

How to use this calculator

1Enter your total fixed costs.
2Enter your price per unit.
3Enter your variable cost per unit.
4See your break-even units, break-even revenue, and contribution margin.

The formula

CM=price−variableCost

units=fixedCostsCM

CM = price − variable cost; break-even units = fixed costs / CM

CM: — Contribution margin = price − variable cost
units: — fixed costs / CM
revenue: — break-even units × price

Worked example

The scenario

$50,000 fixed costs, $40 price, $15 variable cost per unit.

gives

The result

Contribution margin: $25 (62.5%). Break-even: 2,000 units. Break-even revenue: $80,000.

Common use cases

Pricing a new product to ensure it can cover fixed costs.
Setting sales targets for a product launch.
Evaluating whether a price change makes the business viable.

Limitations & assumptions

Assumes a single product with constant price and variable cost.
Treats all costs as cleanly fixed or variable; mixed costs need allocation.
Does not account for volume discounts, taxes, or step-fixed costs.

Frequently asked questions

Divide total fixed costs by the contribution margin per unit (price minus variable cost). The result is the number of units needed to cover all costs.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.

Cost & price inputs