Break-Even Point Calculator
The break-even point is the number of sales at which revenue exactly covers costs โ every sale after that is profit. Enter your fixed costs, selling price and variable cost per unit to see how much you need to sell.
Result
200 units
Break-even point
- Revenue at break-even
- ยฃ5,000.00
- Contribution margin per unit
- ยฃ15.00
How this was calculated
- 1Calculate the contribution margin per unitยฃ25.00 โ ยฃ10.00 = ยฃ15.00
- 2Divide fixed costs by the contribution marginยฃ3,000.00 รท ยฃ15.00 = 200
Formula
Break-even point = fixed costs รท (selling price โ variable cost per unit)
Every sale generates a "contribution margin": the selling price minus the variable cost for that one unit. Divide your fixed costs by that contribution and you know how many units are needed before fixed costs are recovered.
What the variables mean
- vaste kosten
- Costs that donโt change with sales volume, such as rent
- variabele kosten
- Costs per unit sold, such as materials
- dekkingsbijdrage
- What each sale contributes toward covering fixed costs
Worked examples
โฌ 3,000 fixed costs, โฌ 25 selling price, โฌ 10 variable costs
โ Break-even point = 200 units per month.
Common mistakes
- Confusing fixed and variable costs โ rent is fixed, material costs are variable.
- Thinking break-even means profitable; at the break-even point, profit is exactly zero.
When to use it
- Determining whether a new product is financially viable before investing in it.
- Setting a sales target that matches your fixed overhead.
Frequently asked questions
What if my variable costs are higher than my selling price?
Then you lose money on every sale and there is no break-even point โ the more you sell, the bigger the loss. Raise the price or lower variable costs.
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