Break-Even Point Calculator
Calculate exactly how many units you need to sell to cover all your costs. Includes visual chart and sensitivity analysis.
Business Details
Cost Structure
Rent, salaries, insurance, utilities, etc.
Materials, labor, shipping per unit
Sensitivity Analysis
New price: $50
Enter your costs and pricing
to calculate your break-even point
Understanding Break-Even Analysis
Key Formulas
What This Means
- •Break-even point: Where total revenue equals total costs
- •Contribution margin: How much each sale contributes to covering fixed costs
- •Higher margin: Fewer units needed to break even
- •Lower fixed costs: Lower break-even point
Frequently Asked Questions
What are fixed costs vs variable costs?
Fixed costs don't change with sales volume (rent, salaries, insurance). Variable costs change with each unit sold (materials, shipping, sales commissions).
What happens after I reach break-even?
Every unit sold above your break-even point contributes your full contribution margin to profit. This is why higher-volume businesses are often more profitable.
Should I focus on lowering costs or raising prices?
Both help, but raising prices often has a bigger impact. A 10% price increase directly improves contribution margin by 10%, while cutting costs may require larger operational changes.
How often should I recalculate my break-even point?
Recalculate whenever your costs or pricing change significantly, at least quarterly. This helps you stay on top of profitability and make informed pricing decisions.
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