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Estimate a business break-even point

Enter fixed costs for a period, the price per unit and the variable cost per unit. The chart shows where revenue crosses total costs.

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How to use

  1. Enter monthly fixed costs, price and variable cost per unit.
  2. Add a target profit if you want more than break-even.

Worked example

Fixed costs $6,000, price $25, variable cost $10: break-even is 400 units ($10,000 revenue).

Supported formats and limits

InputFixed costs, price per unit, variable cost per unit, target profit
OutputBreak-even units and revenue, chart
EngineUnits = (fixed costs + target profit) ÷ (price − variable cost), rounded up

Limitations

  • Assumes a constant price and variable cost per unit at every volume.
  • Profit here is before income tax.

Questions

How is the break-even point calculated?

Contribution per unit = price − variable cost. Break-even units = fixed costs ÷ contribution, rounded up to a whole unit, and break-even revenue = units × price. $6,000 fixed costs at $25 price and $10 variable cost is 400 units and $10,000.

What is the margin of safety?

If you enter expected sales, the tool shows how far they are above (or below) the break-even volume, so you can see how much sales could fall before you make a loss.

Privacy

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