Break-Even Pricing Calculator

Calculate the minimum price to cover costs plus desired profit at a given sales volume.

By Konstantin Iakovlev · Updated September 2026 · Source: SBA — Business Guide

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Break-Even Price

$25.00

Target Price (with profit)

$31.00

Margin at Target

51.6%

Pricing Breakdown

Break-Even Price$25.00
Target Price$31.00
Gross Margin at Target51.6%
Markup at Target106.7%
Break-Even Units313
Total Revenue at Target$15,500.00

Price Sensitivity

$22.50 (-10% below break-even)33.3% margin | -$1,250.00 profit
$25.00 (Break-even price)40.0% margin | +$0.00 profit
$31.00 (Target price)51.6% margin | +$3,000.00 profit
$34.10 (+10% above target)56.0% margin | +$4,550.00 profit
$38.75 (+25% above target)61.3% margin | +$6,875.00 profit

Volume Sensitivity

250 units$7,750.00 revenue | -$1,000.00 profit
375 units$11,625.00 revenue | +$1,000.00 profit
500 units$15,500.00 revenue | +$3,000.00 profit
625 units$19,375.00 revenue | +$5,000.00 profit
750 units$23,250.00 revenue | +$7,000.00 profit

Use the Break-Even Pricing Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

At what price does a product stop losing money? This calculator answers that by finding the minimum you must charge per unit to cover every cost and still hit your target profit at a given sales volume.

The calculator reports two prices. The break-even price is Fixed Costs / Units Sold + Variable Cost per Unit, the price at which profit is exactly zero. The target price adds Desired Profit / Units Sold on top, which is the same as (Total Fixed Costs + Total Variable Costs + Desired Profit) / Units Sold, where Total Variable Costs are your Variable Cost per Unit times Units Sold. Fixed costs, units and profit are all monthly figures, and neither price yet reflects what the market will bear.

Variable costs are easy to undercount, and the usual culprits are hidden line items such as shipping insurance and payment processing fees. Treat the figure this produces as a floor rather than a recommendation: demand, what competitors charge, and how customers perceive value all shape where your selling price should ultimately land.

Example: Launching a New Eco-Friendly Water Bottle

  1. 1 Input: Fixed Costs (rent, salaries, marketing) = $15,000 a month; Variable Cost per Unit (materials, labor) = $4.50; Units Sold per Month = 2,000; Desired Monthly Profit = $5,000.
  2. 2 Break-even price: $15,000 / 2,000 = $7.50 of fixed cost per bottle, plus the $4.50 variable cost = $12.00. At $12.00 the bottles cover every cost with zero profit.
  3. 3 Target price: $12.00 + ($5,000 / 2,000 = $2.50) = $14.50. Check: $15,000 + ($4.50 × 2,000 = $9,000) + $5,000 = $29,000, and $29,000 / 2,000 = $14.50.
  4. 4 At $14.50 the calculator shows a 69.0% gross margin and a 222.2% markup on the $4.50 variable cost, and 1,500 bottles a month would cover the fixed costs. Charge at least $12.00 to avoid a loss, and $14.50 to reach the $5,000 profit target on 2,000 bottles.

Source: SBA — Business Guide · Last updated: September 2026

Frequently Asked Questions

How do you calculate break-even price?
Break-even price equals total fixed costs divided by the number of units sold, plus the variable cost per unit. This gives the minimum price to cover all costs with zero profit.
What is the difference between break-even price and markup?
Break-even price is the minimum price to cover costs. Markup adds profit on top of cost. A 50% markup on a $10 cost item sets the price at $15, but break-even might be $12 if fixed costs are included.
How many units do I need to sell to break even?
Break-even units equal fixed costs divided by (selling price minus variable cost per unit). This tells you the exact sales volume where total revenue equals total costs.