Break-Even Point Calculator

How to Calculate the Break-Even Point?

The break-even point is the sales level at which your business neither makes a profit nor incurs a loss. To calculate it, you need to know:

• Fixed Costs – Costs that don’t change (e.g., rent, salaries).
• Variable Costs – Costs that vary per unit sold (e.g., materials, packaging).
• Selling Price per Unit – The price at which you sell your product.
  
   

Break-Even Point Formula Calculator:

Break-Even Point (Units) = Fixed Costs ÷ (Selling Price – Variable Cost per Unit)

This break even point formula calculator helps you instantly compute your results without doing manual calculations.

How to Use the Break-Even Point Calculator?

Using our break-even point calculator is simple:

1. Enter your fixed costs.
2. Add your selling price per unit.
3. Input the variable cost per unit.
4. Click Calculate.

You’ll instantly see the number of units you need to sell to break even, and the revenue required to cover all costs.

Examples of Calculating the Break-Even Point

Example 1 – Product Business:

You start a small business selling juice boxes at a school fair.

Before you sell anything, you spend $10,000 on things like a table, a cooler, and signs. These are your fixed costs.

• You sell each juice box for $50
• It costs you $30 to buy one juice box from the store

So you make:

$50 – $30 = $20 profit for each juice box (this is called the contribution margin)

To find out how many juice boxes you must sell to cover your $10,000 setup cost:

$10,000 ÷ $20 = 500 juice boxes

You must sell 500 juice boxes to break even.

After that, you start making a profit.

Example 2 – Service Business:

You start a small business washing cars in your neighborhood.

To get started, you spend $5,000 on buckets, soap, sponges, a water hose, signs, and flyers. These are your fixed costs.

• You charge $100 to wash one car
• It costs you $40 in water, soap, and supplies for each car wash

So your profit for each car wash is:

$100 – $40 = $60 profit per car

To find out how many cars you need to wash to earn back your $5,000:

$5,000 ÷ $60 = about 84 cars

You must wash about 84 cars to break even.

After that, you start making a profit.

Our break-even point calculator makes these scenarios fast and effortless.

Template you can use: Break Even Analysis Template

Disclaimer

This break-even point calculator is provided for general informational purposes only. Results may vary depending on your business model, industry, and cost structure. Always consult with a financial advisor or accountant before making major business decisions.

FAQs

What is a break-even calculator?

A break-even calculator is a tool that helps businesses quickly determine the number of units they must sell (or the revenue they must earn) to cover all their costs, where total revenue equals total costs, allowing them to identify when they start making a profit.

How do you calculate break even points for dummies?

To calculate break-even points simply:

• Step 1: Add up all your fixed costs (like rent, salaries).
• Step 2: Determine your selling price per unit.
• Step 3: Determine your variable cost per unit (costs that change with each unit sold).
• Step 4: Use the formula:

Break-Even Point (Units) = Fixed Costs ÷ (Selling Price – Variable Cost per Unit)

This tells you how many units you need to sell to break even.

How to calculate the break-even point between two numbers?

If you’re comparing two scenarios (two different price points or cost structures), calculate the break-even point for each using the same formula:

Break-Even Point = Fixed Costs ÷ (Selling Price – Variable Cost per Unit)

Then compare the results to see which scenario is more profitable or efficient.

What is the formula for the breakeven value?

Break-Even Point (in Units) = Fixed Costs ÷ (Selling Price – Variable Cost per Unit)

What are the 5 steps of calculating the break-even point?

1. Identify fixed costs, such as rent, salaries, and insurance.
2. Identify Variable Costs per Unit, such as materials and packaging.
3. Determine the Selling Price per Unit
4. Calculate the Contribution Margin: Selling Price – Variable Cost
5. Apply the Formula: Break-Even Point = Fixed Costs ÷ Contribution Margin

How to calculate break-even point with multiple products?

To calculate the break-even point for multiple products, use the standard formula separately for each product:

Break-Even Point (Units) = Fixed Costs ÷ (Selling Price – Variable Cost per Unit)

Simply enter the fixed costs, selling price, and variable cost for each product into the calculator to find how many units of each you need to sell to break even. This method helps you evaluate each product’s profitability independently.

What is an example of a break-even point?

Example:

• Fixed Costs = $10,000
• Selling Price = $50
• Variable Cost = $30

Break-Even Point = $10,000 ÷ ($50 - $30) = 500 units

You must sell 500 units to break even.

What is the purpose of calculating break-even in dollars?

Calculating the break-even point in dollars helps businesses understand the total revenue required to cover all costs. This is helpful for sales planning, goal setting, and profitability analysis.

What is the formula for the break-even point in dollars? 

The formula for calculating the break-even point in dollars is:

Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio

Where:

Contribution Margin Ratio = (Selling Price – Variable Cost) ÷ Selling Price

You can use our break-even point in dollars calculator to quickly compute how much total revenue you need to cover all costs. The break-even point calculator in dollars makes it easy to plan your sales goals and understand when your business will start making a profit.

What is the break-even point commonly calculated by?

The break-even point is commonly calculated using fixed costs, selling price per unit, and variable cost per unit, with the formula:

Break-Even Point = Fixed Costs ÷ (Selling Price – Variable Cost)

These key variables help determine the number of units you need to sell to cover all costs.