Break-Even Point Calculator
Enter your fixed costs, selling price and variable cost per unit to see how many sales it takes to cover your costs.
Enter your fixed costs, selling price and variable cost per unit to see how many sales it takes to cover your costs.
Every formula used by these calculators. They match the FNSACC323 Perform financial calculations unit.
Markup calculates profit as a percentage of the cost price. Profit Margin calculates profit as a percentage of the selling price.
Fixed Costs stay the same no matter how much you sell (e.g. rent, insurance). Variable Cost is what it costs to make or deliver one single unit (materials, packaging, per-item shipping) — it goes up and down with sales, unlike fixed costs. Selling Price is what you charge per unit.
The part in brackets is the contribution margin: what each sale contributes towards fixed costs after covering its own variable cost.
Example. A market stall has fixed costs of $5,000 a month. Each item sells for $25 and costs $10 to make.
Contribution margin = $25 − $10 = $15. Break-even = $5,000 ÷ $15 = 333.3, so 334 sales are needed to be in front. That is about $8,350 in revenue.
Fixed costs stay the same whatever you sell: rent, insurance, software subscriptions, salaries. Variable costs rise with each sale: materials, packaging, card fees, freight.
If the selling price is not higher than the variable cost, there is no break-even point. Every sale loses money and selling more makes it worse. More detail in How to calculate your break-even point.
The level of sales where total revenue equals total costs. Below it the business makes a loss, above it a profit.
Reduce fixed costs, reduce the variable cost per unit, or raise the selling price. Each one increases how much every sale contributes.
Up. If the answer is 333.3 units, 333 sales leaves you slightly short, so you need 334.