Break-Even Calculator.
Calculate how many units you must sell to cover fixed costs, variable costs and reach zero profit or loss.
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How to Use
Enter Fixed Costs
Add rent, salaries, software, utilities and monthly overheads.
Add Price & Cost
Enter selling price and variable cost per unit.
Check Break-Even
View break-even units, revenue target and expected profit.
Break-Even Formula
Standard Formula
Break-Even Units = Fixed Costs / (Price Per Unit - Variable Cost Per Unit)
Costs that do not change with sales volume
Selling price per unit
Direct cost per unit sold
Worked Example
If fixed costs are ?2,00,000, selling price is ?500 and variable cost is ?300, contribution per unit is ?200. Break-even units = ?2,00,000 / ?200 = 1,000 units. After selling more than 1,000 units, the business starts making profit.
Complete Guide
Break-even analysis is one of the most useful calculations for business owners, startups, shopkeepers, manufacturers, service providers and online sellers. It shows the minimum sales needed to cover costs before the business starts earning profit.
Pro Tip: If your break-even units look too high, improve pricing, reduce direct costs or lower monthly fixed expenses.
A business may generate sales but still lose money if contribution per unit is too low. This happens when selling price is weak, discounts are too high or variable costs are not controlled. Break-even analysis makes this problem visible.
Fixed costs include expenses like rent, salaries, utilities, subscriptions, equipment EMI, marketing retainers and other overheads. These costs usually continue even if sales are low.
Variable costs include raw material, packaging, delivery charges, payment gateway charges, sales commission and other costs that increase with each sale. The difference between selling price and variable cost is contribution per unit.
The break-even calculator is especially useful before launching a new product, opening a shop, starting a cloud kitchen, buying machinery or running paid ads. It helps you decide whether your target sales volume is realistic.
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Break-Even FAQ Hub
Everything you need to know about break-even point, revenue and contribution margin.
1. What is a break-even calculator?
A break-even calculator is an online tool that estimates how many units a business must sell to cover fixed and variable costs without making a loss.
2. How is break-even point calculated?
Break-even point is calculated by dividing fixed costs by contribution per unit. Contribution per unit is selling price minus variable cost per unit.
3. What is the break-even formula?
The formula is Break-Even Units = Fixed Costs / (Selling Price Per Unit - Variable Cost Per Unit).
4. What is break-even revenue?
Break-even revenue is the sales revenue needed to cover all fixed and variable costs. It is calculated by multiplying break-even units by selling price per unit.
5. What are fixed costs?
Fixed costs are expenses that generally remain the same regardless of sales volume, such as rent, salaries, software, insurance and office expenses.
6. What are variable costs?
Variable costs change with production or sales volume, such as raw materials, packaging, delivery, commission and direct production cost.
7. What is contribution per unit?
Contribution per unit is the amount left after subtracting variable cost per unit from selling price per unit.
8. What is contribution margin?
Contribution margin is contribution per unit expressed as a percentage of selling price. It shows how much of each sale contributes toward fixed costs and profit.
9. Can this calculator be used for startups?
Yes, startups can use this calculator to understand how much they must sell before becoming profitable.
10. Can this be used for service businesses?
Yes, service businesses can use it by treating each service package, client, project or billable unit as one unit.
11. Can this be used for product businesses?
Yes, product businesses can use it by entering selling price per product and variable cost per product.
12. What if variable cost is higher than selling price?
If variable cost is higher than selling price, contribution becomes negative and the business cannot break even without increasing price or reducing cost.
13. What is margin of safety?
Margin of safety shows how much expected sales are above break-even sales. A higher margin gives more protection against sales decline.
14. Why is break-even analysis important?
Break-even analysis helps business owners set prices, control costs, plan sales targets and understand when the business may start making profit.
15. Does break-even mean profit?
No, break-even means no profit and no loss. Profit starts only after sales cross the break-even point.
16. How can I reduce break-even point?
You can reduce break-even point by lowering fixed costs, reducing variable cost per unit or increasing selling price.
17. Does this calculator include tax?
No, this calculator gives a simple pre-tax business estimate. Taxes and GST should be checked separately based on your business type.
18. Is break-even analysis useful for pricing?
Yes, it helps you understand whether your selling price is enough to cover costs and generate profit.
19. Does HQCalc store my business data?
No, HQCalc does not store your entered break-even data. The calculation runs in your browser.
20. Is this break-even calculator free?
Yes, HQCalc break-even calculator is completely free and does not require sign-up.