Break-even units equal fixed costs divided by the contribution margin per unit, which is price minus variable cost per unit.
TL;DR: Use the break-even calculator and enter fixed costs, selling price, and variable cost per unit. With $10,000 fixed costs, a $100 price, and $20 variable cost, you break even at 125 units.
The formula and a worked example
The break-even point in units is:
break-even units = fixed costs ÷ (price − variable cost per unit)
Say your fixed costs are $10,000 per month. You sell each unit for $100, and each one costs you $20 in materials and other variable expenses. The contribution margin is $100 − $20 = $80. Divide $10,000 by $80 and you get 125 units. Sell fewer than 125 and you lose money. Sell more and you turn a profit.
The contribution margin matters because it tells you how much of every sale is left over after the variable cost. Here, $80 of each $100 sale goes toward your fixed costs until they are paid off.
Break-even revenue and adding a target profit
To express break-even in dollars, multiply 125 units by the $100 price. That is $12,500 in sales. Anything above that line is profit territory.
You can also build in a target. If you want $4,000 of profit on top of covering costs, add it to the fixed costs before dividing. So ($10,000 + $4,000) ÷ $80 = 175 units. You need to sell 175 units to clear your costs and bank $4,000.
Run the numbers for your own business in the break-even calculator and test different prices to see how the target shifts.