Break-Even Point Calculator
Use this free Break-Even Point Calculator to find out how many units you need to sell before your business starts making a profit.
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What Is the Break-Even Point?
The break-even point (BEP) is the stage where total revenue equals total costs. At this point, your business neither makes profit nor loss. Beyond it, every sale generates profit.
Formula:
Break-even point = Fixed Costs ÷ (Selling Price per Unit – Variable Cost per Unit)
Key Components of the Formula
- Fixed Costs: Constant expenses like rent or salaries.
- Variable Costs: Change with production volume.
- Selling Price per Unit: The price at which you sell your product.
Example:
Fixed Costs = $5,000
Variable Cost per Unit = $10
Selling Price per Unit = $25
Break-even = 5000 ÷ (25 – 10) = 333.33 units
You must sell 334 units to cover all costs and start earning profit.
Benefits of Knowing Your Break-Even Point
- Make better pricing decisions
- Control fixed and variable costs
- Forecast profits more accurately
- Boost investor confidence
Why Use This Calculator?
This Break-Even Point Calculator saves time by automatically calculating results and showing how fixed and variable costs affect your profitability.
When Should You Use It?
- When launching a new product
- When planning a pricing strategy
- When presenting a business plan
- When evaluating financial feasibility
Learn More About Break-Even Analysis
If you want to understand break-even analysis in more depth, visit Investopedia’s guide on Break-Even Analysis or read Wikipedia’s article on Break-Even Point.
Conclusion
Knowing your break-even point helps you stay in control of your business. Use this calculator to analyze your costs, adjust prices, and make smarter profit decisions. Try different values to see how changes in pricing or expenses affect your overall profit.