Break-even Calculator
Calculate break-even point
Break-even Calculator
How to Use the Break-even Calculator
1. Select Currency
Choose your preferred currency for accurate calculations and formatting.
2. Enter Fixed Costs
Input total fixed costs (rent, salaries, insurance, etc.) that don't change with production volume.
3. Enter Variable Cost per Unit
Input cost per unit that varies with production (materials, labor per unit, etc.).
4. Enter Selling Price per Unit
Input the price at which you sell each unit of your product or service.
5. Analyze Results
Review break-even point, contribution margin, and profit/loss scenarios.
6. Download Report
Export detailed break-even analysis for your business planning.
Understanding Break-even Analysis
What is Break-even Point?
The break-even point is the level of sales where total revenue equals total costs. At this point, the business neither makes a profit nor incurs a loss.
- • Revenue = Total Costs
- • Profit = Zero
- • Risk Assessment: Minimum sales needed
- • Pricing Strategy: Cost-based pricing guide
Break-even Formula
Break-even Units
Fixed Costs ÷ Contribution Margin
Break-even Revenue
Break-even Units × Selling Price
Contribution Margin
Selling Price - Variable Cost
Break-even Calculation Example
Fixed Costs: ₹50,000, Variable Cost: ₹20/unit, Selling Price: ₹30/unit
Contribution Margin
₹10/unit
Break-even Units
5,000 units
Break-even Revenue
₹1,50,000
Types of Costs in Break-even Analysis
Fixed Costs
Costs that remain constant regardless of production volume or sales.
- • Rent and utilities
- • Salaries and insurance
- • Depreciation and loan payments
- • Marketing and administrative costs
Variable Costs
Costs that vary directly with the level of production or sales volume.
- • Raw materials and packaging
- • Direct labor costs
- • Sales commissions
- • Shipping and delivery costs
Contribution Margin
The amount each unit sold contributes towards covering fixed costs and generating profit.
Contribution Margin = Selling Price - Variable Cost
Higher contribution margin means fewer units needed to break even
Margin of Safety
The difference between actual sales and break-even sales. Shows how much sales can drop before losses occur.
Margin of Safety = Actual Sales - Break-even Sales
Higher margin of safety indicates lower business risk
Multi-Currency Support
Perform break-even analysis in different currencies for international business planning.
Frequently Asked Questions
Why is break-even analysis important?
Break-even analysis helps businesses understand the minimum sales volume needed to avoid losses, make informed pricing decisions, and assess the financial viability of new products or services.
What if my contribution margin is negative?
A negative contribution margin means your selling price is lower than variable costs. This indicates that each unit sold is losing money, and you need to either increase prices or reduce variable costs before break-even analysis is meaningful.
How often should I calculate break-even?
Break-even analysis should be recalculated whenever there are significant changes in fixed costs, variable costs, or selling prices. Regular review (quarterly or annually) helps track business performance and make timely adjustments.
Can break-even analysis be used for services?
Yes, break-even analysis works for service businesses too. Instead of units, you can use hours, projects, or clients. Variable costs might include materials, subcontractor fees, or per-client expenses, while fixed costs remain similar (rent, salaries, etc.).