Break-Even Analysis Calculator

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A Break-even Analysis Calculator determines the level of sales at which total revenue equals total costs, resulting in zero profit or loss. More info →

Input

Enter values to calculate break-even analysis.

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How This Calculator Works

Every unit you sell earns its selling price minus its variable cost. That difference, the contribution, goes towards your fixed costs. Break-even is the number of units at which contributions exactly cover fixed costs. Every unit after that is profit.

The Formulas

Contribution per Unit = Selling Price − Variable Cost
Break-Even Units = Fixed Costs ÷ Contribution per Unit
Units for Target Profit = (Fixed Costs + Target Profit) ÷ Contribution per Unit

Break-Even Sales = Units × Price · Margin of Safety = Expected Units − Break-Even Units · Profit = Expected Units × Contribution − Fixed Costs

What Each Input Does

Fixed Costs: Costs that don't change with sales, such as rent and salaries.
Variable Cost Per Unit: The cost of producing one more unit.
Selling Price Per Unit: What each unit sells for. It must be higher than the variable cost.
Expected Sales Units: How many units you expect to sell, used for the profit and margin of safety.
Target Profit: A profit goal, used to work out the units needed to reach it.

Step by Step

Contribution per unit and the contribution margin ratio (%) are worked out.
Fixed costs are divided by contribution per unit for break-even units, then multiplied by price for break-even sales.
The margin of safety and profit at expected sales are worked out.
Units needed for your target profit are worked out.

Reading the Result

Positive margin of safety – expected sales are above break-even, so you make a profit.

Negative – expected sales fall short, so you make a loss.

Quick Example

Fixed costs 500,000, variable cost 60, price 100, expected sales 20,000 units, target profit 200,000. Contribution is 40 a unit (40%), so break-even is 12,500 units (1,250,000 in sales). Expected sales give a margin of safety of 7,500 units and a profit of 300,000. The target profit needs 17,500 units.