Determine the sales volume needed to cover all costs.
Results
Break-Even Point (Units): –
Break-Even Revenue ($): –
The Break-Even Analysis calculator identifies the minimum sales level that a business must achieve to recover all its operating costs. This tool determines the break-even point, expressed in terms of both the number of units sold and the total revenue required, using standard cost accounting principles. The assessment follows this equation:
Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit) = Break-Even Units
Fixed costs, such as insurance, rent, and administrative salaries, remain constant regardless of production activity. In contrast, variable costs, including direct labor and raw materials, fluctuate based on production volume. The contribution margin per unit is found by subtracting the variable cost per unit from the selling price. This margin indicates how much of each unit’s sale contributes toward covering fixed expenses. A company reaches its break-even point, where profits are zero, when total contributions equal total fixed costs.
Furthermore, the calculator also calculates the required revenue as follows:
Break-Even Revenue = Break-Even Units × Selling Price
In addition to providing numerical outputs, this tool generates a visual representation of the break-even analysis, comparing total expenses with total revenue at varying sales levels. The point where these two lines meet signifies the break-even point.
Directions for Using the Calculator:
- Enter your total fixed costs.
- Specify the variable cost per unit.
- Input the selling price per unit.
- Click Calculate to view the graph and results.
- For documentation or planning purposes, download the PDF report.
This tool helps business owners, financial analysts, and decision-makers conduct price evaluations, cost analyses, and sales target planning.