Break-Even Price Calculator

A break-even price calculation determines the minimum price per unit needed to cover both fixed costs (such as rent or salaries) and variable costs (such as materials or labour per unit) at your expected sales volume. The result shows the price threshold: revenue below this point creates a loss, while revenue at or above it covers all costs without surplus or deficit. The break-even price is most sensitive to changes in fixed costs and expected volume.

Quick example

With fixed costs of 5,000 and variable cost per unit of 8 (plus expected volume of 500), the result is 18.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Fixed Costs, Variable Cost per Unit, and Expected Volume.

What's happening under the hood

Price = variable cost + fixed costs allocated per unit. At this price, total revenue exactly equals total cost. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Worked example

A small manufacturer produces hand-finished goods. Fixed costs for the month are 3,200 (rent, utilities, base salaries). Each unit costs 12 in materials and direct labour. The business expects to produce and sell 400 units in the month.

Break-even price = 12 + (3,200 ÷ 400) = 12 + 8 = 20 per unit. At this price, total revenue of 8,000 exactly covers fixed costs of 3,200 and variable costs of 4,800. Pricing at 22 per unit generates 800 contribution toward profit; pricing at 18 per unit creates a 800 shortfall.

Common scenarios

• Product launch pricing: testing whether a planned price covers actual costs
• Scaling production: recalculating break-even as volume changes
• Service pricing: setting hourly or per-project rates when fixed overheads exist
• Seasonal business: adjusting expected volume downward in low seasons to find realistic break-even
• Cost reduction analysis: seeing how supply chain savings or automation affect minimum viable price

What the result does and does not capture

The calculation shows the price floor for cost recovery. It does not account for competitive positioning, customer willingness to pay, market demand curves, taxes, financing costs, or desired profit margin. A price that breaks even is not the same as a price that succeeds in the market. This figure is a starting point, not a final pricing decision.

For educational illustration

This calculator models cost structure and break-even mechanics. The result is intended to show how fixed costs, variable costs, and volume interact. Use it to understand your cost base and test scenarios; outcomes depend on the accuracy of your input figures and assumptions about volume and cost stability.