Break-Even Calculator
Find out how many units you need to sell before your business covers its costs — and see exactly how fixed costs, variable costs, and pricing work together to get you there.
This calculator provides a simplified break-even estimate based on the values you enter. Actual business results may vary because of changing costs, prices, taxes, fees, demand, discounts, returns, and other operating factors.
How is break-even calculated?
Fixed costs vs. variable costs
Fixed costs generally stay the same regardless of how many units you sell — rent, monthly salaries, software subscriptions, and insurance are common examples. Variable costs generally change with how many units you sell — materials, product acquisition, packaging, and per-unit shipping are common examples. Real businesses often have costs that are only partly fixed or partly variable; this calculator assumes the amounts you enter hold reasonably steady across the range you're analyzing.
Contribution margin per unit
₱500 − ₱300 = ₱200. Each unit sold contributes ₱200 toward covering fixed costs — and once those are covered, ₱200 of every additional sale becomes operating profit.
Contribution margin ratio
₱200 ÷ ₱500 = 40%. Under this model's assumptions, 40% of every peso of sales is left over after variable costs, available to cover fixed costs and, beyond that, profit.
Break-even units
₱50,000 ÷ ₱200 = 250 units. This divides by the contribution margin, not by the full selling price — dividing by ₱500 instead would answer a different, wrong question (how many units of pure revenue equal your fixed costs), ignoring that ₱300 of every ₱500 sale is immediately spent on that unit's variable cost. Only the ₱200 that's left over after variable costs is actually available to pay down fixed costs, so that's what has to divide into them.
Why round break-even units up?
The exact formula can land on a fraction — a service business with ₱40,000 in fixed costs and a ₱1,500 contribution margin needs 26.67 theoretical units to break even. Selling 26 services leaves you just short of covering fixed costs, so the minimum whole number actually required is 27 services — rounded up, not to the nearest whole number. The distinction matters whenever the exact result is close to a whole number from below: 250.25 units, for instance, rounds to 250 with ordinary rounding (Math.round) — one unit short of actually breaking even — but correctly rounds up to 251 with Math.ceil. Because you can't sell a fraction of a real sale, this calculator always rounds the minimum whole-unit requirement up, never to the nearest whole number.
Examples
Small retail business
Food product
Service business
Selling 26 units falls just short of covering fixed costs — 27 is the minimum whole number actually needed.
Profit and loss scenarios
Using the small retail business above (₱50,000 fixed costs, ₱500 price, ₱300 variable cost, 250-unit break-even):
400 units sold (above break-even)
Operating Profit: ₱30,000.00
100 units sold (below break-even)
Operating Loss: ₱30,000.00
Important information
Break-even analysis is a simplified model
Real businesses often sell multiple products at different prices and costs, offer discounts and returns, face seasonal demand, and deal with tiered pricing or changing supplier costs. This calculator assumes a single product or service with a steady price and cost.
Costs aren't always purely fixed or variable
Some expenses are semi-variable — a phone plan with a base fee plus per-minute charges, for example. Split mixed costs into their fixed and variable portions as best you can before entering them here.
This is an estimate, not a guarantee
Break-even and target-profit results depend entirely on the fixed costs, price, and variable cost you enter staying reasonably consistent. Treat the result as a planning estimate, not a promise of business outcomes.
Taxes and fees aren't included automatically
This calculator doesn't calculate VAT, percentage tax, or income tax. If transaction or platform fees apply to your sales, factor them into your variable cost per unit to reflect them here.
Frequently asked questions
The break-even point is the number of units you need to sell for your revenue to exactly cover your total costs — the point where you're neither making a profit nor a loss.
Break-Even Units = Fixed Costs ÷ Contribution Margin Per Unit. For example, ₱50,000 in fixed costs with a ₱200 contribution margin per unit needs 250 units to break even.
Contribution Margin Per Unit = Selling Price − Variable Cost. It's what's left from each sale after covering the cost of that specific unit — the amount each sale "contributes" toward fixed costs and, once those are covered, profit.
Contribution Margin Ratio = Contribution Margin ÷ Selling Price, shown as a percentage. A 40% ratio means 40% of every peso in sales is left over after variable costs, available to cover fixed costs and profit.
Costs that generally stay the same regardless of how many units you sell — rent, salaries, insurance, and software subscriptions are common examples. Real businesses can have costs that are only partly fixed; this calculator assumes the amount you enter holds steady across the range you're analyzing.
Costs that generally change with how many units you sell — materials, product acquisition, packaging, and per-unit shipping are common examples. Enter the cost for one unit; the calculator multiplies it by quantity.
Every unit sold loses money before fixed costs are even considered, so break-even can never be reached by selling more — more sales just means more loss. This calculator rejects that input with an explanation rather than showing a misleading result.
The exact formula can produce a fraction, like 250.25 units, but you can't sell a quarter of a unit. Rounding down (250) would leave you short of actually breaking even, so the minimum whole-unit requirement is always rounded up to 251, using Math.ceil rather than ordinary rounding.
The total sales revenue at the break-even point — Break-Even Units × Selling Price. It's the same number as Fixed Costs ÷ Contribution Margin Ratio.
Required Units = (Fixed Costs + Target Profit) ÷ Contribution Margin Per Unit. It's the same formula as break-even, just with your target profit added on top of fixed costs as what needs to be recovered.
No. This calculator works with revenue, fixed costs, and variable costs as you enter them. It doesn't calculate VAT, percentage tax, or income tax.
No — break-even means ₱0 profit, not a profitable business. You need to sell more than the break-even quantity to generate an operating profit.
Yes, in reality. A business selling several products at different prices and costs has a different contribution margin — and break-even quantity — for each one, and a combined break-even that depends on the sales mix. This calculator models a single product or service at a time.
It's a simplified model that assumes selling price, variable cost, and fixed costs stay constant across the range you're analyzing. Real businesses can face tiered pricing, changing supplier costs, capacity limits, and seasonal demand that this model doesn't capture — treat the result as an estimate, not a guarantee.
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