Break-Even Calculator
Calculate exactly how many units your business must sell to cover fixed overhead costs and achieve zero losses.
Calculator Inputs
LiveHow to use the Break-Even Calculator
- 1Enter total periodic fixed costs (rent, salaries, software, insurance).
- 2Enter the unit selling price.
- 3Enter the variable cost incurred to produce one single unit.
- 4View required break-even units, break-even sales revenue, and contribution margin.
How Break-Even is Calculated
Break-even is reached when total revenue equals total costs (both fixed and variable). Each unit sold generates a contribution margin toward covering fixed costs.
Fixed costs remain constant regardless of output, while variable costs scale with each unit produced.
- 1Contribution Margin = $30 - $10 = $20 per candle
- 2Break-Even Units = $6,000 / $20 = 300 candles
- 3Break-Even Revenue = 300 × $30 = $9,000
What affects Break-Even results
- Negotiations on supplier raw material pricing.
- Increases or reductions in fixed overhead like office rent or salaried staff.
- Bulk pricing and tiered volume discounts.
Frequently Asked Questions
What happens if variable cost exceeds selling price?
If variable cost is higher than price, contribution margin is negative, meaning every sale increases total losses. The business will never break even without raising prices or lowering costs.
How do price discounts impact the break-even point?
Lowering prices reduces your contribution margin per unit, meaning you must sell significantly more volume to cover the same fixed overhead.
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