Break-Even Calculator
Calculate how many units you need to sell to cover your costs
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Break-Even Calculator
Total fixed costs that don't change with production volume (rent, salaries, etc.)
Cost that changes with each unit produced (materials, direct labor, etc.)
Selling price for each unit of your product or service
Calculation Result
Enter valid values to see the calculation
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About Break-Even Analysis
Break-even analysis is a financial calculation that determines the point at which total costs equal total revenue. At this point, there is no profit or loss – the business has "broken even." This analysis is crucial for business planning, pricing strategies, and financial decision-making.
Understanding your break-even point helps you set realistic sales targets, make informed pricing decisions, evaluate new product viability, and assess the impact of changes in costs or prices on your business's profitability.
With our tool, you can:
- Calculate how many units you need to sell to cover all costs
- Determine the revenue required to break even
- Visualize the relationship between costs, revenue, and profit
- Understand your contribution margin and contribution margin ratio
- Make informed decisions about pricing, costs, and sales targets
Key Components of Break-Even Analysis
Fixed Costs
Expenses that remain constant regardless of production or sales volume. These must be paid even if no units are produced or sold.
Examples:
- Rent and utilities
- Salaries and wages
- Insurance premiums
- Loan payments
- Depreciation
Variable Costs
Expenses that change in proportion to production or sales volume. These increase as more units are produced or sold.
Examples:
- Raw materials
- Direct labor
- Packaging
- Shipping costs
- Sales commissions
Contribution Margin
The difference between the selling price per unit and the variable cost per unit. It represents the portion of each sales dollar that contributes to covering fixed costs and generating profit.
A higher contribution margin means each unit sold contributes more to covering fixed costs and generating profit, resulting in a lower break-even point.