Overview
The Break-Even Point Calculator helps you determine how many units of a product or service you need to sell to cover your fixed and variable costs. This point represents the minimum sales volume required before a business starts generating profit.
It's a vital tool for entrepreneurs, business analysts, and pricing strategists who want to evaluate financial feasibility, set targets, and understand cost-revenue dynamics.
Formula & Methodology
The break-even point (in units) is calculated using the formula:
Break-even Units = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit)
Once you find the break-even quantity, the corresponding break-even revenue is simply:
Break-even Revenue = Break-even Units × Price per Unit
This analysis assumes linear pricing and costs, and does not account for taxes, inventory changes, or discounts.
Examples
- Fixed Costs: $5,000
- Selling Price: $100
- Variable Cost: $60
- → Break-even Quantity = 125 units
- → Break-even Revenue = $12,500
- Fixed Costs: €2,000
- Selling Price: €50
- Variable Cost: €30
- → Break-even = 100 units (€5,000 revenue)
Use Cases
- Business startup planning and viability assessment
- Pricing strategy adjustments
- Cost-revenue analysis for product launches
- Scenario planning (What-if analysis)
- Financial presentations and funding pitches
FAQ
What is the break-even point?
It's the sales volume (in units or revenue) at which total revenue equals total costs — meaning no profit and no loss.
How is break-even different from profit?
Break-even represents the point where profits start. Any sales beyond the break-even quantity contribute to profit.
Can I use this for services?
Yes, if you can estimate per-unit variable cost and selling price for your service offering.