What is Break-Even Point?
The break-even point is the level of sales at which a business covers all its costs, with neither profit nor loss. It represents the exact point where total revenue equals total expenses. Beyond this point, every sale contributes to profit; below it, the business operates at a loss.
Break-even Analysis Calculator
Why Do We Use It?
Break-even analysis is used for setting sales targets, reviewing product viability, and assessing the impact of cost changes. The calculator helps decision-makers determine whether to expand, discontinue, or reprice a product. By simplifying complex financial data, it supports smarter, faster decisions and ensures that every step taken aligns with sustainable business growth.
How To Calculate Break-Even Point?
- Identify the fixed costs such as rent, insurance, and salaries.
- Calculate the variable cost per unit (materials + packaging + direct labour)
- Set the selling price per unit
- Compute the contribution margin per unit (Selling Price − Variable Cost)
- Determine break-even units (Fixed Costs ÷ Contribution Margin)
- Convert break-even units into sales revenue (Break-Even Units × Selling Price)
Better Insights = Better Business Decisions
Making good business decisions begins with good insights. Whiz Consulting offers expert accounting and financial services tailored to your needs.