Break-even Calculator
Calculate break-even point for business
About This Calculator
The Break-even Calculator determines the number of units you need to sell to cover all costs (fixed and variable). This is essential for business planning and understanding when your business becomes profitable.
How It Works
- 1
Enter your total fixed costs (rent, salaries, insurance, etc.).
- 2
Input the variable cost per unit (materials, labor per unit, etc.).
- 3
Enter the price you charge per unit.
- 4
The calculator computes the break-even point in units and revenue.
Formula Explanation
Contribution Margin = Price Per Unit - Variable Cost Per UnitThe contribution margin is the amount each unit contributes to covering fixed costs after variable costs are paid.
Break-Even Units = Fixed Costs / Contribution MarginDivide fixed costs by the contribution margin to find how many units must be sold to break even.
Break-Even Revenue = Break-Even Units × Price Per UnitMultiply break-even units by price per unit to get the revenue needed to break even.
Tips
Fixed costs remain constant regardless of production volume.
Variable costs change with production volume.
Lower variable costs or higher prices improve your break-even point.
Break-even analysis helps set pricing and production targets.