Break-Even Analysis Calculator
Calculate the sales volume in units and total revenue required to cover fixed overheads. Plot sales vs. costs, check expected profit, and measure margins of safety.
Cost-Volume-Profit Chart
Volume Projections
| Units Sold | Total Revenue | Fixed Costs | Variable Costs | Total Costs | Operating Income |
|---|---|---|---|---|---|
| 0 | $0.00 | $10,000.00 | $0.00 | $10,000.00 | -$10,000.00 |
| 75 | $3,750.00 | $10,000.00 | $1,500.00 | $11,500.00 | -$7,750.00 |
| 150 | $7,500.00 | $10,000.00 | $3,000.00 | $13,000.00 | -$5,500.00 |
| 225 | $11,250.00 | $10,000.00 | $4,500.00 | $14,500.00 | -$3,250.00 |
| 300 | $15,000.00 | $10,000.00 | $6,000.00 | $16,000.00 | -$1,000.00 |
| 375 | $18,750.00 | $10,000.00 | $7,500.00 | $17,500.00 | $1,250.00 |
| 450 | $22,500.00 | $10,000.00 | $9,000.00 | $19,000.00 | $3,500.00 |
| 525 | $26,250.00 | $10,000.00 | $10,500.00 | $20,500.00 | $5,750.00 |
| 600 | $30,000.00 | $10,000.00 | $12,000.00 | $22,000.00 | $8,000.00 |
| 675 | $33,750.00 | $10,000.00 | $13,500.00 | $23,500.00 | $10,250.00 |
Understanding Break-Even Math
The calculator solves for the profit threshold using unit economics:
- Contribution Margin: Unit Sales Price minus Unit Variable Cost. This is the net margin contributed by each unit sold to cover overheads.
- Break-Even Point (Units): Total Fixed Costs divided by the Contribution Margin per unit.
- Break-Even Revenue: Break-Even Units multiplied by the Unit Sales Price.
- Margin of Safety: The difference between your expected sales volume and the break-even volume, representing the buffer you have before operating at a loss.
Frequently asked questions
What is a break-even analysis?
A break-even analysis calculates the point at which a business's total revenues equal its total expenses. At this volume, the business generates zero net profit and zero net loss; every sale beyond this threshold contributes directly to net profits.
What is the difference between fixed and variable costs?
Fixed costs are business expenses that remain constant regardless of sales volume (such as rent, insurance, core salaries, and software subscriptions). Variable costs are expenses that fluctuate directly with sales volume (such as raw materials, packaging, transaction processing fees, and direct manufacturing labor).
What is the contribution margin?
Contribution margin is the selling price per unit minus the variable cost per unit. It represents the amount of money each sale generates to contribute towards covering fixed costs. Once fixed costs are covered, the contribution margin is the profit generated per unit.