Break-Even Point Calculator
Break-even units equal fixed costs divided by the margin per unit (price minus variable cost), rounded up.
Worked example
| Total fixed costs | $12,000 |
|---|---|
| Variable cost per unit | $8 |
| Price per unit | $20 |
| Break-Even Point (Units) | 1,000 |
| Break-Even Point (Revenue) | $20,000 |
How it is calculated
Break-even units = fixed costs / (price per unit - variable cost per unit); the calculator rounds up to whole units. Break-even revenue = break-even units x price per unit.
The price per unit must be higher than the variable cost per unit, otherwise there is no break-even volume.
Assumptions and limits
- Assumes price and variable cost per unit stay constant at every volume.
- Taxes and financing costs are not modelled.
Educational estimate only; not financial, tax, legal or investment advice.
FAQ
How do I calculate the break-even point?
Divide total fixed costs by the margin per unit. With 12,000 fixed costs, a 20 price and an 8 variable cost, break-even is 1,000 units.
What is break-even revenue?
Break-even units multiplied by the selling price: 20,000 in the example.
What if the price is below the variable cost?
Each sale loses money, so no number of units reaches break-even.