Break-Even Calculator
Enter fixed costs, variable costs, and selling price to calculate break-even point.
Break-Even Guide
Break-even point is where revenue equals total costs. Selling above this quantity generates profit.
Break-Even Units = Fixed Costs รท (Price - Variable Cost)
Worked Examples
Fixed costs of 5,000,000, a price of 25,000 and variable cost of 15,000 give a contribution margin of 10,000 and a break-even of 500 units.
Selling 800 units yields 800 ร 10,000 โ 5,000,000 = 3,000,000 of profit.
Assumptions Behind Break-Even
Break-even analysis assumes a constant price and constant variable cost per unit, so it ignores volume discounts, step changes such as hiring a second shift, and mixed product ranges. It also works in units and money over a period, not in cash-flow timing.
Frequently Asked Questions
- What is contribution margin?
- Price minus variable cost per unit - the amount each sale contributes to covering fixed costs and then to profit.
- How do I break even in sales value?
- Multiply the break-even volume by the unit price: 500 units at 25,000 is 12,500,000 of revenue.
- Does break-even include loan repayments?
- Not unless you count them as fixed costs. Interest and principal repayments belong in fixed costs if you want a cash break-even.