Break-even Point Calculator

H2: What is the Break-even Point?

The break-even point is the sales amount—either in units or revenue—where total costs equal total revenue. At this point, your business neither makes a profit nor a loss. Knowing your break-even point helps you understand the minimum sales target needed to avoid losses.

H2: How to Use the Break-even Point Calculator?

To use this calculator, simply enter your fixed costs (costs that don’t change with sales volume), variable costs per unit, and the selling price per unit. The calculator will instantly show you the number of units you need to sell to reach your break-even point.

H2: Break-even Point Formula

The break-even point in units is calculated as:
Break-even Point (units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit)
This formula helps you determine the minimum units needed to cover all costs.

H2: Example Calculation

Imagine you have fixed costs of $10,000 per month, your product sells for $50, and the variable cost per unit is $30.
Using the formula:
Break-even Point = 10,000 / (50 - 30) = 500 units.
You need to sell 500 units to cover all your costs.

H2: Frequently Asked Questions

Q: Why is knowing the break-even point important?
A: It helps you set sales targets, price products correctly, and make informed business decisions.

Q: Can this calculator be used for services?
A: Yes, as long as you can estimate fixed and variable costs related to your service.