Break-Even Calculator
Calculate how many units you need to sell to cover your fixed and variable costs. See break-even revenue, contribution margin, expected profit or loss, and margin of safety.
Business Details
Enter your fixed costs, selling price per unit, variable cost per unit and expected sales quantity.
Expected Sales Analysis
This section compares your expected sales with the calculated break-even point.
Break-Even Breakdown
Review the financial position at break-even and at your expected sales quantity.
| Item | At Break-Even | At Expected Sales |
|---|
What is Break-Even Point?
The break-even point is the sales level where total revenue equals total costs. At this point, the business has covered the fixed and variable costs included in the calculation and has neither an operating profit nor an operating loss.
Break-Even Formula
Selling Price Per Unit − Variable Cost Per Unit
Break-Even Units
Fixed Costs ÷ Contribution Per Unit
Break-Even Revenue Formula
For an exact continuous calculation, break-even sales revenue can also be calculated using the contribution margin ratio.
Break-Even Example
Selling Price: ₹1,000 per unit
Variable Cost: ₹600 per unit
Contribution Per Unit:
₹1,000 − ₹600
= ₹400
Break-Even Quantity:
₹1,00,000 ÷ ₹400
= 250 units
Break-Even Revenue:
250 × ₹1,000
= ₹2,50,000
What is Contribution Margin?
Contribution is the amount from each sale that remains after variable cost is deducted. This amount first contributes toward covering fixed costs. Once fixed costs have been covered, additional contribution generally becomes operating profit under this simplified model.
Contribution Per Unit ÷ Selling Price × 100
What is Margin of Safety?
Margin of safety measures how far expected or actual sales are above the break-even level. A larger positive margin provides a greater cushion before the business reaches its break-even point.
Fixed Costs vs Variable Costs
Fixed costs generally remain relatively stable within a relevant activity range, such as rent or certain salaries. Variable costs change with the number of units produced or sold, such as materials, packaging or per-unit commissions. Correctly separating these costs is important for useful break-even analysis.
Disclaimer: This Break-Even Calculator is intended for educational and business-planning purposes only. It assumes a constant selling price and variable cost per unit and treats entered fixed costs as fixed over the relevant sales range. Real businesses may have taxes, GST, discounts, stepped fixed costs, multiple products, changing prices, inventory effects and other costs that are not included here.