Break-even calculator
Enter the fixed costs for the period, the price of one unit and the cost of making one more. The page shows the units and the sales that cover those costs, and the units that also reach a profit target.
- Units and sales
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How to use it
- Enter the fixed costs for the period.
- Enter the price and the variable cost of one unit.
- Read the break-even units and sales. Add a profit target when you want one.
How the break-even point is worked out
Each unit sold contributes its price minus its variable cost. Break-even units are the fixed costs divided by that contribution, and break-even sales are those units times the price. The contribution margin is that contribution as a percentage of the price.
A profit target is added to the fixed costs before the division, so the result is the units that cover the costs and leave that profit. When the unit count falls between two whole units, the page also shows the next whole unit, which is the count that covers the costs in full.
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Questions
What goes in fixed costs?
Fixed costs stay the same for the period, such as rent and salaries. Materials, packaging and shipping that rise with each unit go in the variable cost.
What if every sale needs to leave a profit?
Put that profit in the profit target. The units then cover the fixed costs and the target together.
How do I handle several products?
Use a weighted average price and variable cost when the mix of products stays steady. One product uses its own price and cost.
Where does tax sit?
Use the price and the costs in the same way you keep your books. A tax-inclusive price belongs in the price field along with the tax you charge.