Break-Even Calculator
Determine how many units you need to sell to cover all costs and start making profit
Calculate Break-Even Point
Selling price per unit
Direct costs per unit (materials, labor, etc.)
Rent, utilities, salaries, insurance, etc.
Desired profit above break-even
Break-Even Analysis Results
Formula used: Break-Even Units = Fixed Costs ÷ Contribution Margin
Contribution Margin: $15.00 per unit (33.3%)
Safety Margin: 33.3%
Break-Even Planning Steps
Calculate Costs
Determine fixed and variable costs
Include all operational expenses
Set Pricing
Determine optimal selling price
Consider market conditions
Plan Sales
Develop sales strategy
Reach break-even targets
Business Tips
Lower fixed costs reduce break-even point
Higher contribution margins improve profitability
Consider market demand when setting targets
Review break-even regularly as costs change
Understanding Break-Even Analysis
What is Break-Even Analysis?
Break-even analysis determines the point at which total revenue equals total costs, resulting in neither profit nor loss. It's essential for business planning, pricing strategies, and financial decision-making.
Why is it Important?
- •Determines minimum sales needed to avoid losses
- •Helps set realistic sales targets
- •Guides pricing and cost management decisions
- •Evaluates business viability and risk
Key Formulas
Break-Even Units = Fixed Costs ÷ Contribution Margin
Contribution Margin = Price - Variable Cost
Break-Even Revenue = Break-Even Units × Price
- Fixed Costs: Expenses that don't change with production volume
- Variable Costs: Expenses that change with each unit produced
- Contribution Margin: Amount each unit contributes to covering fixed costs
Note: Break-even analysis assumes linear cost and revenue relationships