Break-Even Point Calculator
Calculate the number of units you need to sell to cover all costs. Analyze profitability, margin of safety, and explore what-if scenarios.
🧮Calculator Inputs
Enter your cost and pricing data
Break-Even Analysis
Enter your costs and pricing to calculate your break-even point, analyze profitability, and explore different scenarios.
AI Business & Startup Finance Explainer (beta)
Educational only • Not financial advice
Ask things like: "What does my break-even point mean for my business?", "How can I lower my break-even?", "Is my contribution margin healthy?", or "What happens if I increase my price by 10%?"
This AI is experimental and may be inaccurate. Always validate important business, financial, and strategic decisions with qualified professionals before acting on them.
Understanding Break-Even Analysis
What is Break-Even Point?
The break-even point is the level of sales at which total revenue equals total costs, resulting in zero profit or loss. At this point, a business has covered all its fixed and variable costs but hasn't yet made a profit. Understanding your break-even point helps you set sales targets, make pricing decisions, and assess the viability of new products or services.
Key Formulas
Understanding Cost Types
Fixed Costs
Costs that remain constant regardless of production volume:
- • Rent or lease payments
- • Salaries (fixed staff)
- • Insurance premiums
- • Equipment depreciation
- • Loan payments
Variable Costs
Costs that change with production volume:
- • Raw materials
- • Direct labor (per unit)
- • Packaging
- • Shipping costs
- • Sales commissions
When to Use Break-Even Analysis
Limitations to Consider
- • Assumes linear relationships: In reality, costs and revenues may not scale linearly
- • Static analysis: Doesn't account for changes over time or market conditions
- • Single product focus: More complex for multi-product businesses
- • Ignores capacity constraints: Doesn't consider production limits
- • Simplified cost classification: Some costs are semi-variable in nature
Frequently Asked Questions
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Master Your Business Finances
Understanding your break-even point is crucial for pricing decisions, cost control, and profitability planning
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