Break-Even Calculator

Calculate your business break-even point quickly and accurately. Determine exactly how many units you need to sell to cover all your costs and start making profit.

Business Break-Even Analysis

$
Monthly fixed costs (rent, insurance, salaries, etc.)
$
Cost per unit (materials, labor, shipping)
$
Price you sell each unit for

Calculation Steps

  1. Calculate Contribution Margin per Unit: Selling Price per Unit - Variable Cost per Unit
  2. Calculate Break-Even Point in Units: Fixed Costs ÷ Contribution Margin per Unit
  3. Calculate Break-Even Point in Revenue: Break-Even Units × Selling Price per Unit
  4. Calculate Contribution Margin Ratio: (Contribution Margin per Unit ÷ Selling Price per Unit) × 100

About This Calculator

Our Break-Even Calculator is a powerful financial tool designed to help businesses determine the exact point where total revenues equal total costs. This critical metric helps entrepreneurs and business owners understand the minimum sales volume needed to avoid losses.

The calculator provides comprehensive analysis including break-even units, break-even revenue, contribution margin, and contribution margin ratio - all essential metrics for business planning and decision-making.

Whether you're starting a new business, launching a product, or analyzing existing operations, this tool provides the insights you need to make informed financial decisions.

How to Use

Step 1: Enter Fixed Costs

Input your total fixed costs - expenses that remain constant regardless of production volume (rent, insurance, salaries, utilities).

Step 2: Enter Variable Cost per Unit

Input the cost to produce one unit of your product or service (materials, direct labor, shipping).

Step 3: Enter Selling Price per Unit

Input the price you charge customers for each unit of your product or service.

Step 4: Select Currency

Choose your preferred currency from the dropdown menu for accurate formatting.

Step 5: Calculate

Click "Calculate Break-Even" to get your comprehensive analysis results.

Formula Used

Break-Even Point (Units):

Break-Even Units = Fixed Costs ÷ (Selling Price per Unit - Variable Cost per Unit)

Break-Even Point (Revenue):

Break-Even Revenue = Break-Even Units × Selling Price per Unit

Contribution Margin:

Contribution Margin = Selling Price per Unit - Variable Cost per Unit

Contribution Margin Ratio:

Contribution Margin Ratio = (Contribution Margin ÷ Selling Price) × 100

Use Cases / Applications

Business Planning

  • New business startup planning
  • Product launch analysis
  • Investment decision making
  • Pricing strategy development

Financial Analysis

  • Cost structure optimization
  • Profitability assessment
  • Risk management planning
  • Performance benchmarking

Operations Management

  • Production volume planning
  • Capacity utilization analysis
  • Supply chain optimization
  • Resource allocation

Strategic Planning

  • Market entry strategies
  • Competitive analysis
  • Growth planning
  • Exit strategy planning

Examples

Example 1: Coffee Shop

  • Fixed Costs: $5,000/month (rent, utilities, staff)
  • Variable Cost per Cup: $1.50 (coffee, milk, cup)
  • Selling Price per Cup: $4.00
  • Break-Even Point: 2,000 cups/month
  • Break-Even Revenue: $8,000/month

Example 2: Online Course

  • Fixed Costs: $2,000/month (platform, marketing, support)
  • Variable Cost per Sale: $15 (payment processing, materials)
  • Selling Price per Course: $199
  • Break-Even Point: 11 courses/month
  • Break-Even Revenue: $2,189/month

Example 3: Manufacturing Business

  • Fixed Costs: $50,000/month (facility, equipment, overhead)
  • Variable Cost per Unit: $25 (materials, labor)
  • Selling Price per Unit: $75
  • Break-Even Point: 1,000 units/month
  • Break-Even Revenue: $75,000/month

Frequently Asked Questions

What is a break-even point?

The break-even point is the level of sales at which total revenues equal total costs, resulting in neither profit nor loss. It's the minimum number of units you need to sell to cover all your business expenses.

How do you calculate break-even point?

Break-even point (in units) = Fixed Costs ÷ (Selling Price per Unit - Variable Cost per Unit). This formula tells you exactly how many units you need to sell to break even.

What are fixed costs vs variable costs?

Fixed costs remain constant regardless of production volume (rent, insurance, salaries). Variable costs change with production levels (materials, direct labor, shipping costs).

What is contribution margin?

Contribution margin is the amount remaining from sales revenue after variable costs are deducted. It contributes to covering fixed costs and generating profit.

How often should I calculate break-even point?

Calculate your break-even point whenever there are significant changes in costs, pricing, or business operations. Regular monthly or quarterly analysis is recommended for most businesses.

Can break-even analysis help with pricing decisions?

Yes, break-even analysis helps determine minimum pricing requirements and evaluate the impact of price changes on profitability and required sales volumes.