Analyze Costs & Profits
Essential for every business
Determine exactly how many units you need to sell to start making a profit.
Understand the minimum sales volume required to cover your costs and avoid losses.
Experiment with different selling prices to see how they affect your break-even point.
Analyze the impact of reducing variable costs or fixed costs on your profitability.
Visualize the relationship between revenue, fixed costs, and variable costs.
Set realistic sales targets for your team based on concrete break-even data.
The Break-Even Point (BEP) is the point at which total cost and total revenue are equal. There is no net loss or gain, and one has "broken even." It is calculated by dividing the total fixed costs of production by the contribution margin per unit (Selling Price - Variable Cost).
Costs that don't change with production (Rent, Salaries).
Costs that vary directly with output (Materials, Labor).
Selling Price - Variable Cost. Covers fixed costs.
Common queries about Break-Even
Break-Even Point (Units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Break-Even Point (Sales) = Break-Even Units * Selling Price.