₹1,00,000 fixed costs, ₹200 variable cost, ₹500 selling price
Inputs
- fixedCosts
- 100000
- variableCost
- 200
- sellingPrice
- 500
Result
Break-even units = 334 and break-even revenue = ₹1,67,000.
Business
Break-Even Calculator
Calculate the number of units and sales revenue needed to cover your fixed and variable costs.
Break-Even Calculator calculator
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Break-Even Calculator
Enter the values below to calculate your result.
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Enter the required values and click Calculate to see your result.
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How does the break-even calculator work?
Enter your fixed costs, variable cost per unit, and selling price per unit. The calculator subtracts the variable cost from the selling price to determine the contribution margin per unit, then divides fixed costs by that margin to calculate the break-even point. The number of units is rounded up because a physical product cannot normally be sold in a fraction of a unit.
Formula
Break-Even Units = Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit)Examples
₹2,50,000 fixed costs, ₹500 variable cost, ₹1,000 selling price
Inputs
- fixedCosts
- 250000
- variableCost
- 500
- sellingPrice
- 1000
Result
Break-even units = 500 and break-even revenue = ₹5,00,000.
₹75,000 fixed costs, ₹150 variable cost, ₹400 selling price
Inputs
- fixedCosts
- 75000
- variableCost
- 150
- sellingPrice
- 400
Result
Break-even units = 300 and break-even revenue = ₹1,20,000.
About this calculator
A break-even calculator helps businesses determine how many units they need to sell before their total revenue covers their total costs.
The break-even point occurs when total revenue equals total fixed costs plus total variable costs. At this point, the business has neither a profit nor a loss.
Break-even units are calculated by dividing fixed costs by the contribution margin per unit. The contribution margin is the selling price per unit minus the variable cost per unit.
Break-even analysis can help businesses evaluate pricing, sales targets, cost structures, and the number of units required to cover operating costs.
The calculation assumes that the selling price and variable cost per unit remain constant. Real-world results may differ when prices, costs, product mix, or sales conditions change.
Frequently asked questions
What is the break-even point?
The break-even point is the sales level at which total revenue equals total costs. At this point, the business has neither a profit nor a loss.
How is break-even calculated?
Break-even units are calculated by dividing fixed costs by the contribution margin per unit. The contribution margin is the selling price per unit minus the variable cost per unit.
What is contribution margin?
Contribution margin per unit is the amount remaining from each sale after subtracting the variable cost of producing or delivering that unit.
Why must the selling price be higher than the variable cost?
The selling price must be higher than the variable cost so that each sale contributes something toward covering fixed costs. If the variable cost is equal to or higher than the selling price, there is no positive contribution margin.
Why are break-even units rounded up?
Break-even units are rounded up because selling a fraction of a physical unit is generally not practical. Rounding up ensures the calculated sales volume covers the required costs.
Does reaching the break-even point mean the business makes a profit?
No. At the break-even point, total revenue equals total costs. Profit begins when sales exceed the break-even level under the same assumptions.
How can a business lower its break-even point?
A business can generally lower its break-even point by reducing fixed costs, reducing variable costs, increasing the selling price, or improving the contribution margin.
What assumptions does break-even analysis make?
Basic break-even analysis generally assumes that fixed costs remain fixed, variable cost per unit remains constant, and the selling price per unit remains constant over the relevant sales range.
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