Break-Even Analysis Calculator

About Break-Even Analysis

Break-even analysis determines the point where total revenue equals total costs, resulting in neither profit nor loss.

Key Formulas

• Break-Even Units: Fixed Costs ÷ (Selling Price - Variable Cost per Unit)
• Contribution Margin: Selling Price - Variable Cost per Unit
• Margin of Safety: Actual Sales - Break-Even Sales

Analysis Types

• Basic Analysis: Find break-even point in units and revenue
• With Target Profit: Calculate sales needed to achieve desired profit
• Margin of Safety: Analyze risk and safety cushion above break-even

How to Use

1. Choose your analysis type
2. Enter your fixed costs (rent, salaries, insurance, etc.)
3. Enter variable cost per unit (materials, labor per unit)
4. Enter selling price per unit
5. For advanced analysis, enter target profit or sales units
6. Click Calculate to see comprehensive break-even analysis

Key Concepts

• Fixed Costs: Costs that don't change with production volume
• Variable Costs: Costs that increase with each unit produced
• Contribution Margin: Amount each unit contributes to fixed costs and profit
• Margin of Safety: Buffer between actual sales and break-even point

Interpreting Results

• High Contribution Margin (>50%): Good pricing power, lower risk
• High Margin of Safety (>20%): Safe distance from break-even
• Low Break-Even Point: Easier to achieve profitability
• Scenarios Table: Shows profit/loss at different sales levels

Applications

• Product pricing decisions
• Business planning and budgeting
• Investment evaluation
• Risk assessment
• Sales target setting

Try Sample Calculation

Click "Load Sample" to see typical break-even analysis with example business values.