Break-Even Calculator
Calculate how many units you need to sell before your business starts generating a profit. This tool visualizes the break-even point where your total revenue equals your total costs.
Fixed costs that don't change with production volume (rent, salaries, insurance, etc.)
Costs that vary with each unit produced (materials, direct labor, packaging, etc.)
How to Use the Break-Even Calculator
- Enter Fixed Costs - Input your total fixed costs that don't vary with production volume.
- Enter Variable Costs Per Unit - Input the cost that varies with each additional unit produced.
- Enter Selling Price Per Unit - Input the price at which you sell each unit.
- Click Calculate - The calculator will determine how many units you need to sell to break even.
- View the Visualization - The chart shows your total costs and revenue across different production volumes.
Formula Used:
Break-Even Point (units) = Fixed Costs / (Selling Price Per Unit - Variable Cost Per Unit)
The denominator (Selling Price Per Unit - Variable Cost Per Unit) is also known as the Contribution Margin per Unit.
Business Applications
The break-even analysis is a powerful business planning tool that helps you:
- Determine the minimum sales volume needed to avoid losses
- Evaluate new product feasibility before launch
- Analyze the impact of price changes on profitability
- Assess how cost structure changes affect your business
- Set realistic sales targets for your business
- Make informed decisions about investments and expansions
Related Articles
- Understanding Break-Even Analysis for Small Businesses
Learn how break-even analysis can help small businesses make better pricing and production decisions.
- 5 Strategies to Reduce Your Break-Even Point
Discover practical ways to lower your break-even point by adjusting fixed costs, variable costs, and pricing strategy.
- Multi-Product Break-Even Analysis Explained
Explore how to perform break-even analysis when your business sells multiple products with different margins.