Break-Even Calculator - Find Your Break-Even Point
Calculate break-even point in units and revenue. Understand fixed costs, variable costs, contribution margin, and profit at any sales volume.
About this calculator
This break-even calculator works in rupees and goes a step beyond the basic formula. Besides the break-even units and revenue, it shows the contribution margin ratio, the profit at the volume you plan to sell and a profit-and-loss table that steps through different sales levels, so you can see exactly where the business turns profitable.
That table is the useful part. It shows the loss at zero sales, which is simply your fixed costs, and how it shrinks with each block of units until it crosses zero. Use it to set a sales target, to test a price change, or to explain the economics of a plan to a partner or lender.
How to use it
- Enter total Fixed Costs for the period.
- Enter the Variable Cost per Unit and the Selling Price per Unit.
- Enter the Expected Units you plan to sell.
- Press Calculate Break-Even and read the summary and the table.
Formulas and the P&L table
Contribution margin = Selling price − Variable cost per unit. Break-even units = Fixed costs ÷ Contribution margin. Break-even revenue = Break-even units × Selling price. Profit at any volume = (Units − Break-even units) × Contribution margin. Round the units up, because you cannot sell part of a unit.
Worked example
Fixed costs ₹1,00,000, variable cost ₹50, price ₹120, 2,000 units
| Contribution margin | ₹70 per unit |
| Contribution margin ratio | 58.33% |
| Break-even units | 1,429 |
| Break-even revenue | ₹1,71,429 |
| Profit at 2,000 units | ₹40,000 |
| Profit margin | 16.67% |
The sales are 40% above break-even, so there is a safety margin. If sales fall below 1,429 units, the business makes a loss, and at zero sales the loss equals the full ₹1,00,000 of fixed cost.
Tips and common mistakes
- Fixed costs are the bills you pay whether or not you sell: rent, salaries, software, insurance. Variable costs rise with each unit.
- If the contribution margin is small, a modest rise in price or a modest cut in variable cost moves the break-even point a long way.
- Run the numbers for a pessimistic month as well as a hopeful one. Plan cash for the pessimistic case.
- Break-even is a monthly picture. If your costs change by season, recalculate each season.
- Do not forget your own pay. If you take nothing from the business, your true break-even is higher than the one shown.
Frequently asked questions
What does the P&L table show?
The revenue, total cost and profit or loss at several sales volumes, so you can see where profit begins.
What is the margin of safety?
How far your expected sales are above break-even. Here it is 2,000 − 1,429 = 571 units, or about 29% of expected sales.
What is the contribution margin ratio?
The contribution margin divided by the price. It is the share of every sale that contributes to fixed costs and profit.
Should I use monthly or yearly figures?
Either, as long as fixed costs and units cover the same period.
Why round break-even units up?
Because you cannot sell a fraction of a unit, and you only break even once you pass the exact number.
Does the calculation include tax?
No. Enter figures excluding GST or sales tax.