Break-Even Calculator
Calculate your break-even point in units and revenue. Enter fixed costs, variable cost per unit, and selling price to see exactly when you turn profitable.
Cost & Price
Rent, salaries, insurance — costs that don't change with volume
Materials, packaging, commission — costs per unit sold
The price at which you sell each unit to customers
Break-Even Point
1,667 units
Revenue: ₹8.34 Lakh
Fixed Costs
₹5 Lakh
Variable Costs (BEP)
₹3.33 Lakh
BEP Revenue
₹8.34 Lakh
Contribution Margin
₹300 / unit
Margin %
60.0%
At BEP — Variable Costs Total
₹3.33 Lakh
How It Works
The break-even point is where total revenue equals total costs — zero profit, zero loss. Each unit sold above variable cost contributes a fixed amount toward covering fixed costs; this is the contribution margin. Once total contributions equal total fixed costs, you've broken even. Every unit sold beyond that point generates pure profit equal to the contribution margin.
Break-Even Formula
Contribution Margin = Selling Price − Variable Cost per Unit. Break-Even Units = Fixed Costs ÷ Contribution Margin. Break-Even Revenue = Break-Even Units × Selling Price.
Example: Fixed costs ₹5,00,000 · Variable cost ₹200/unit · Price ₹500/unit → Contribution margin = ₹300 · Break-even = 5,00,000 ÷ 300 = 1,667 units · BEP revenue = ₹8.33 Lakh.
Key Concepts
- Contribution Margin
- Price − Variable cost per unit — each unit's contribution to covering fixed costs
- Margin of Safety
- How far actual sales can fall below expected before you hit break-even
- Fixed Costs
- Rent, salaries, insurance — don't change with output volume
- Variable Costs
- Materials, packaging, commission — scale directly with units sold
Frequently Asked Questions
What is the contribution margin?
Contribution margin = Selling price − Variable cost per unit. It is the amount each unit sold contributes to covering fixed costs. Once fixed costs are fully recovered, contribution margin becomes profit per unit.
What counts as a fixed cost vs a variable cost?
Fixed costs don't change with volume — rent, salaries, insurance, software subscriptions. Variable costs scale directly with production — raw materials, packaging, shipping, sales commission. Misclassifying them leads to an inaccurate break-even point.
What does a high break-even point mean for my business?
A high break-even point means you need to sell many units before reaching profitability — this signals high fixed cost burden or a low contribution margin. Strategies to lower it: reduce fixed costs, raise prices (if the market allows), or reduce variable costs.
How do I use break-even analysis for pricing decisions?
Work backwards — decide the maximum number of units you can realistically sell, set that as your target break-even volume, then solve for the minimum selling price: Price = (Fixed Costs ÷ Target Units) + Variable Cost. Add your desired profit margin on top of that.