Break-Even Calculator

Guide and Formula

The break-even point is where total revenue equals total costs—neither profit nor loss.

\text{Break-Even Units} = \frac{\text{Fixed Costs}}{\text{Price Per Unit} - \text{Variable Cost Per Unit}}

Fixed Costs: Expenses that don't change with production (rent, salaries)

Variable Costs: Costs that vary with each unit produced (materials, labor)

Contribution Margin: Price minus Variable Cost per unit

Any sales below break-even = Loss

Any sales above break-even = Profit

?FAQs

Why is break-even important?

Break-even analysis helps set sales targets, price products, and understand the minimum volume needed to cover costs.

How can I lower my break-even point?

Reduce fixed costs, increase price per unit, or reduce variable costs per unit through efficiency or better sourcing.

What if my price is less than variable cost?

You'll never break even. Each unit sold adds to your loss. You must either raise price or reduce variable costs.