What is Break-even Analysis Calculator?
Calculate business break-even point in units and revenue based on fixed costs, variable costs, and selling price Simply enter your values, and the calculator instantly computes accurate results using standard financial formulas. All calculations are performed entirely in your browser — nothing is stored or transmitted.
Formula Used
Contribution Margin (CM) = Selling Price − Variable Cost. CM covers fixed costs first; sales above BEP generate profit. BEP is where Total Revenue = Total Costs. Above BEP: every unit sold contributes pure profit at the CM rate.
How to Use This Calculator
- Enter total monthly or annual fixed costs (rent, salaries, EMIs, insurance)
- Enter variable cost per unit (materials, packaging, direct labor)
- Enter selling price per unit
- Click Calculate to see BEP in units and revenue
- Enter target profit to find units needed to achieve that profit
Worked Example
Fixed Costs: ₹2,00,000/month | Variable Cost: ₹150/unit | Selling Price: ₹350/unit → CM: ₹200/unit | BEP: 1,000 units/month | Revenue at BEP: ₹3,50,000
Why Use This Tool?
- Know the minimum sales needed to cover all costs
- Price products confidently based on cost structure
- Evaluate impact of fixed cost reduction on BEP
- Plan for profit milestones beyond break-even
Frequently Asked Questions
What is Break-even Analysis?
Break-even analysis identifies the sales volume at which total revenue equals total costs — no profit, no loss. Above the break-even point, every additional unit sold generates profit equal to the contribution margin. It is a fundamental tool for pricing, budgeting, and business planning.
What is Contribution Margin?
Contribution Margin = Selling Price − Variable Cost per Unit. It represents how much each unit sold contributes towards covering fixed costs and generating profit. A ₹350 product with ₹150 variable cost has ₹200 CM — each unit sold contributes ₹200 towards rent, salaries, and profit.
How to use BEP for pricing decisions?
If BEP at current price requires more units than you can sell, you need to either: raise price (increases CM), reduce variable costs (raises CM), reduce fixed costs (lowers BEP), or exit the business. BEP analysis reveals minimum viable pricing before starting a venture.
Explore more business & accounting calculators or try our other free financial tools.