Break-even is the moment a product stops costing you money and starts making it. One division finds it — but the inputs force the two questions every business must answer: what does a unit really cost, and what overhead must sales carry?
Contribution margin does the heavy lifting
Sell at $25 with $10 of per-unit cost and each sale contributes $15 toward rent, salaries and software. With $6,000 of monthly fixed costs, break-even is 6,000 ÷ 15 = 400 units — $10,000 of revenue. Unit 401 onward, the $15 contribution becomes pure profit: sell your planned 600 and the profit readout shows $3,000.
Sorting costs into the right bucket
Fixed costs arrive whether you sell or not: rent, salaries, insurance, subscriptions. Variable costs ride along with each unit: materials, packaging, transaction fees, shipping. Gray areas (utilities, part-time labor) go wherever they behave — the test is "does this cost double if sales double?"
The lever most people underrate
Because contribution margin is the divisor, price changes act on break-even with leverage. Raising the $25 price by $2 lifts contribution to $17 and drops break-even from 400 to 353 units — a 12% improvement from an 8% price move. Cutting fixed costs helps linearly; pricing helps geometrically. The margin calculator prices individual units; this page tells you how many of them the overhead demands.
When the math says stop
If price sits at or below variable cost, contribution is zero or negative and no volume ever breaks even — more sales just lose more. The calculator flags this state explicitly, because it's the single most valuable warning a spreadsheet can give a new business.
For information only; simplified single-product model.