Product Break-Even Calculator
Calculate how many units you need to sell to break even on development costs, unit cost, and selling price.
Break-Even Analysis
Break-even analysis tells you how many units you must sell to cover your fixed (development) costs.
Formula:
Break-Even Units = Fixed Costs / (Selling Price - Unit Cost)
Profit per Unit = Selling Price - Unit Cost
Where:
- Fixed Costs = One-time development, tooling, or setup costs
- Unit Cost = Variable cost to produce one unit (materials, labor, shipping)
- Selling Price = Price charged to the customer
Example:
- Development cost: $50,000
- Unit cost: $15
- Selling price: $40
- Break-even = $50,000 / ($40 - $15) = 2,000 units
Key insight: The break-even point drops dramatically as the margin (selling price - unit cost) increases.