Break Even Calculator
Calculate your break-even point, the number of units you need to sell, and the sales revenue required to cover your business costs. Enter your fixed costs, variable cost per unit, and selling price to get your results.
Step-by-step
Enter Your Business Numbers
Don't worry if these terms are new to you. Each step explains exactly what to enter.
Costs you pay even when you make zero sales.
Examples: rent, salaries, software subscriptions, insurance and other regular business expenses.
How much it costs you to make or deliver one unit.
Examples: materials, packaging, shipping, payment fees or other costs that increase when you sell another unit.
The amount your customer pays for one unit.
For example, if you sell a product for 500, enter 500.
Your Result
Break-Even Analysis
Your answer will appear here
Enter the three numbers on the left. We'll show exactly how many units you need to sell before your business covers its costs.
Break-even means
Total revenue = Total costs
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Break-Even Point Formula
The break-even point is the sales level at which total revenue equals total costs. To calculate the break-even point in units, divide your fixed costs by the contribution margin per unit.
Break-Even Units Formula
Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
How to calculate break-even revenue
First, calculate the contribution margin ratio by dividing the contribution per unit by the selling price. Then divide fixed costs by that ratio to find the theoretical break-even revenue.
Break-Even Revenue Formula
Fixed Costs ÷ Contribution Margin Ratio
Contribution Margin Ratio = (Selling Price − Variable Cost per Unit) ÷ Selling Price
What do the three inputs mean?
Fixed costs
Expenses such as rent, insurance, and regular salaries that do not directly vary with sales volume over the relevant period.
Variable cost per unit
The additional cost associated with producing or delivering one unit, such as materials or packaging.
Selling price per unit
The amount your business receives for one unit before subtracting its variable cost.
Break-Even Point Example
Suppose a small business has fixed costs of ₹50,000 for a given period. Each product sells for ₹500, and the variable cost per product is ₹250.
Calculation
₹50,000 ÷ (₹500 − ₹250) = 200 units
The business must sell 200 units to cover its costs. At ₹500 per unit, break-even revenue is ₹1,00,000. This assumes the price and unit costs remain constant.
Use the calculator above with your own figures to calculate your break-even units and sales revenue.
How to Use Your Break-Even Results
Your break-even result is a starting point for business planning. Compare the required sales volume with your expected demand and operating capacity before making a pricing or investment decision.
If your expected sales are below break-even
Review your fixed costs, variable expenses, selling price, and realistic sales forecast. The calculation estimates the volume needed to cover costs; it does not guarantee that customers will buy that quantity.
If you want to reduce your break-even point
Consider whether fixed costs can be reduced, variable costs can be controlled, or prices can be adjusted without hurting demand. Each change affects the contribution available to cover fixed costs.
If your business sells multiple products
This calculator uses one selling price and one variable cost per unit. Businesses with different products may need a weighted-average contribution margin based on their expected sales mix.
Understand the assumptions
A basic break-even calculation assumes costs and selling prices remain stable over the period being analyzed. Actual results may differ because of discounts, changing costs, taxes, waste, unsold inventory, or changes in customer demand. Include relevant costs in your inputs when they apply to your business.
Frequently Asked Questions About Break-Even Analysis
Find answers to common questions about break-even points, formulas, fixed costs, variable costs, contribution margin, and business sales planning.
What is a break-even calculator?+
A break-even calculator estimates the number of units a business must sell to cover its fixed and variable costs. It can also calculate break-even revenue and contribution margin using the entered selling price and costs.
How do you calculate the break-even point?+
Divide fixed costs by the contribution margin per unit. Contribution margin per unit equals selling price per unit minus variable cost per unit. If fixed costs are ₹50,000 and contribution margin is ₹250, the break-even point is 200 units.
What is the break-even quantity formula?+
Break-even quantity = Fixed costs ÷ (Selling price per unit − Variable cost per unit). If the result is a decimal and you need a whole-unit sales target, round up to the next whole unit.
How do you calculate break-even sales revenue?+
Break-even sales revenue equals fixed costs divided by the contribution margin ratio. The ratio is calculated by dividing contribution per unit by selling price per unit. This formula assumes a consistent selling price and cost structure.
What happens when selling price equals variable cost?+
The contribution margin is zero, so each sale contributes nothing toward fixed costs. A finite break-even point cannot be reached through additional sales under these assumptions.
Can I use a break-even calculator for a service business?+
Yes. Treat the price charged for one service as the selling price per unit and estimate the variable cost of delivering that service. Include relevant fixed costs for the period you are analyzing.
Is this break-even calculator free?+
Yes. Kaaf11 provides this online break-even calculator free of charge, without requiring an account or registration.