Free Online Calculators
Costs that don't change with output (rent, salaries, etc.)
Costs that change per product (materials, labor per unit)
Price at which you sell one unit
Calculate profit at a specific number of units
Enter your costs and pricing, then click calculate
Step-by-step guide to get accurate results
Break-even analysis is a fundamental financial tool that helps businesses determine when they will start making profit. Our Break-Even Calculator helps you find the exact point where your total revenue equals your total costs - meaning you're neither making a profit nor a loss.
This calculator is essential for:
The break-even point (BEP) is the level of sales at which total revenues equal total costs. At this point:
✓ Total Revenue = Total Costs
✓ Profit = Zero
✓ Every unit sold after this point generates profit
Understanding your break-even point helps you set realistic sales targets and pricing strategies.
### Break-Even Units Formula
The fundamental formula to calculate break-even point in units:
Where:
### Break-Even Revenue Formula
Once you know the break-even units:
Where:
### Fixed Costs (FC)
Costs that remain constant regardless of production volume:
Examples:
### Variable Costs (VC)
Costs that change directly with production volume:
Examples:
### Selling Price (P)
The price at which you sell one unit of your product or service. This should cover both variable costs and contribute to fixed costs.
### What is Contribution Margin?
Contribution margin is the amount each unit contributes toward covering fixed costs and generating profit:
### Contribution Margin Percentage
Expressed as a percentage of selling price:
Why it matters:
Example:
Let's walk through a real-world example:
Scenario: Small bakery selling artisan bread
Given:
Calculation:
Interpretation:
The bakery needs to sell 2,857 loaves per month to break even. Every loaf sold beyond this generates €3.50 in profit.
Break-even analysis fails when:
### Selling Price ≤ Variable Cost
If your selling price is equal to or less than your variable cost per unit:
Why? You lose money on every unit sold, so you can never cover fixed costs.
Solution:
Example of impossible break-even:
### Pricing Decisions
Use break-even analysis to test different price points:
### Cost Management
Reducing Fixed Costs:
Reducing Variable Costs:
### Sales Targets
Set realistic sales goals:
### Calculating Target Profit
To find units needed for a specific profit target:
Example:
### Total Profit Formula
Profit at any sales level:
Simplified:
Break-even analysis assumes:
⚠️ All units are sold (no inventory buildup)
⚠️ Costs are linear (no economies of scale)
⚠️ Fixed costs remain constant (within relevant range)
⚠️ Selling price doesn't change with volume
⚠️ Product mix is constant (single product or consistent mix)
In reality: