# Break-Even Calculator

> Computes the contribution margin per unit and the number of units and revenue required for total revenue to equal total costs (or to reach a target profit).

- Calculator id: `break-even` · Category: Finance (`finance`) · Tool name: `calculate_break_even`
- Canonical page: https://tttkmbb.com/finance/break-even · This document: https://tttkmbb.com/finance/break-even.md · JSON definition: https://tttkmbb.com/finance/break-even.json

## Purpose

Computes the contribution margin per unit and the number of units and revenue required for total revenue to equal total costs (or to reach a target profit).

**Use when:** You are planning a product, service or event and need to know how many units must be sold at a given price to cover fixed costs, or to earn a specific profit.

**Do not use when:** Price or variable cost changes with volume (needs a stepwise or non-linear model), or you only need margin/markup on one unit (use margin-markup).

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `fixed_costs` | number |  | required | Total costs that do not change with volume over the period (rent, salaries, equipment). (min 0, max 1000000000000) |
| `price_per_unit` | number |  | required | Revenue received per unit sold. (> 0, max 1000000000) |
| `variable_cost_per_unit` | number |  | required | Cost incurred for each unit produced or sold (materials, commissions, shipping). (min 0, max 1000000000) |
| `target_profit` | number |  | optional, default 0 | Optional profit to earn on top of covering fixed costs. (min 0, max 1000000000000) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `contribution_margin_per_unit` | number |  | price_per_unit − variable_cost_per_unit. |
| `contribution_margin_ratio_percent` | number | % | contribution margin / price × 100. |
| `break_even_units` | number | units | (fixed_costs + target_profit) / contribution margin per unit. |
| `break_even_units_rounded_up` | integer | units | break_even_units rounded up to the next whole unit. |
| `break_even_revenue` | number |  | break_even_units × price_per_unit, equivalently (fixed_costs + target_profit) / contribution margin ratio. |

## Formula

`contribution_margin = price_per_unit − variable_cost_per_unit; break_even_units = (fixed_costs + target_profit) / contribution_margin; break_even_revenue = break_even_units × price_per_unit`

Linear cost-volume-profit model: constant price and variable cost per unit, fixed costs constant over the relevant range, single product.

## Data Sources

- Investopedia – Break-Even Analysis: Definition and Formula — https://www.investopedia.com/terms/b/breakevenanalysis.asp (reference, retrieved 2026-09-23)
- Wikipedia – Break-even (economics) — https://en.wikipedia.org/wiki/Break-even_(economics) (reference, retrieved 2026-09-23)
- Wikipedia – Contribution margin — https://en.wikipedia.org/wiki/Contribution_margin (reference, retrieved 2026-09-23)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/break-even?fixed_costs=…&price_per_unit=…&variable_cost_per_unit=…`
- `POST https://tttkmbb.com/api/v1/calculate/break-even` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/break-even · OpenAPI operationId `calculate_break_even` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "break-even", "inputs": {…}}`

## Example

- 10,000 fixed, price 50, variable 30: inputs `{"fixed_costs":10000,"price_per_unit":50,"variable_cost_per_unit":30}` → `{"contribution_margin_per_unit":20,"contribution_margin_ratio_percent":40,"break_even_units":500,"break_even_units_rounded_up":500,"break_even_revenue":25000}`
- 60,000 fixed, price 25, variable 10, target profit 15,000: inputs `{"fixed_costs":60000,"price_per_unit":25,"variable_cost_per_unit":10,"target_profit":15000}` → `{"contribution_margin_per_unit":15,"break_even_units":5000,"break_even_revenue":125000}`

```
GET https://tttkmbb.com/api/v1/calculate/break-even?fixed_costs=10000&price_per_unit=50&variable_cost_per_unit=30
```

## Limitations

Price or variable cost changes with volume (needs a stepwise or non-linear model), or you only need margin/markup on one unit (use margin-markup). Linear cost-volume-profit model: constant price and variable cost per unit, fixed costs constant over the relevant range, single product. All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**What if the variable cost is higher than the price?**

Every sale loses money and no volume can cover fixed costs; the calculator returns an error asking for a higher price or lower unit cost.

**Is break-even revenue the same as break-even units times price?**

Yes. It can also be computed directly as fixed costs divided by the contribution margin ratio, which is useful when you only know the ratio.

## Related

- [Margin and Markup Calculator](https://tttkmbb.com/finance/margin-markup.md) — Set the unit price from cost and a target margin.
- [ROI Calculator](https://tttkmbb.com/finance/roi.md) — Evaluate the return once the project is profitable.