Break-Even Point & Margin-Markup Analyzer
Find how many units you must sell each month to cover your costs, and how many to reach a profit target. See contribution margin, margin of safety and operating leverage, and convert between margin and markup so your prices really earn what you expect.
Written by Suhaib Hassan. Formulas follow standard managerial accounting. Our methodology.
It finds the contribution of each unit, divides fixed costs by it for break-even, and converts between margin and markup.
Pricing goes wrong when margin and markup are mixed up or break-even is a guess. This gets both right.
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A 40% margin needs a 66.7% markup. Pricing with a 40% markup only gives a 28.6% margin, so the gap can quietly eat your profit.
Margin and markup lookup
What each gross margin means as a markup and as a selling price on a given cost.
| Gross margin | Markup needed | Price on $50 cost | Price on $100 cost | Profit per $100 cost |
|---|
Break-even price and cost sensitivity
How the break-even volume changes if your price or variable cost moves, from your inputs above.
| Change | Price | Break-even units (price change) | Variable cost | Break-even units (cost change) |
|---|
Cost-volume-profit basics
Break-even units
Q = fixed costs ÷ (price − variable cost)Contribution margin
ratio = (price − variable cost) ÷ priceTarget profit
units = (fixed costs + target profit) ÷ contribution per unitOperating leverage is total contribution ÷ operating income. It shows how much profit changes for a 1% change in sales.
Margin, markup and break-even
Margin is profit as a share of the selling price, while markup is profit as a share of cost. The same sale gives a higher markup than margin, which is why they must not be swapped.
Break-even assumes a steady price and cost per unit. Discounts, volume pricing and step costs will move it.
Worked examples
Illustrative businesses, each checked by hand. The first is the default setup.
Break-even volume
Fixed costs $12,500, variable cost $24.50, price $65.
12,500 ÷ 40.50 = 308.64
309 units, revenue 309 × 65 = $20,085
Target profit
Same business, $5,000 profit wanted.
433 units, revenue = $28,145
Margin to markup
Cost $100 and a 40% gross margin.
profit = 66.67
markup = 66.67 ÷ 100 = 66.67%
How to find your break-even point
- Add up your fixed costs for the period, such as rent, salaries and subscriptions.
- Work out the variable cost of one unit, and its selling price.
- Divide fixed costs by the contribution per unit (price minus variable cost).
- Round up to whole units, because you cannot sell part of a unit.
If the price is at or below the variable cost, you never break even, however much you sell. Raise the price, cut variable costs, or reduce fixed costs.
By Suhaib Hassan · Reviewed 29 September 2026 · How CalculatePilot verifies formulas →
Sources
- Garrison, Noreen and Brewer, Managerial Accounting, chapter on cost-volume-profit relationships.
- Horngren, Datar and Rajan, Cost Accounting: A Managerial Emphasis.
- U.S. Small Business Administration, Calculate your startup costs and break-even guidance.
Frequently asked questions
What is the break-even point?
It is the sales volume at which total revenue equals total costs, so profit is exactly zero. Above it you make a profit and below it you make a loss.
What is the difference between margin and markup?
Margin is profit divided by the selling price, and markup is profit divided by the cost. A product costing $100 sold at $150 has a 33.3% margin but a 50% markup.
What is contribution margin?
It is the selling price minus the variable cost of a unit. It is the amount each sale contributes toward covering fixed costs and then profit.
What is the margin of safety?
It is how far sales can fall before you hit break-even, shown here as a percentage of your target volume. A bigger cushion means lower risk.
How do I lower my break-even point?
Raise the price, reduce variable costs per unit, or cut fixed costs. The sensitivity table shows how much a 5% or 10% change in price or variable cost moves the number of units.
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