Break-Even Calculator
Key takeaways
- Each unit sells for ₹500.00 and carries ₹300.00 of variable cost — ₹200.00 of contribution; 2,500 such units exactly cover the ₹5.00 L of fixed costs.
- At break-even the period has taken ₹12.50 L of revenue for zero profit — past it, each further unit adds its full ₹200.00 contribution to profit.
- At a ₹550.00 selling price, contribution becomes ₹250.00 and break-even falls to 2,000 units — 500 fewer.
Contribution margin — what each ₹100 of sales leaves after variable costs
Of every ₹100 of sales, ₹40.00 remains after variable costs — the contribution (₹200.00 a unit) that covers fixed costs first and becomes profit after.
Profit at different sales volumes
Break-even at 2,500 units (₹12.50 L of revenue) — below it the period runs at a loss, above it each unit adds its ₹200.00 contribution to profit.
| Units sold | Revenue | Total cost | Profit |
|---|---|---|---|
| 0 | ₹0 | ₹5.00 L | −₹5.00 L |
| 1,250 | ₹6.25 L | ₹8.75 L | −₹2.50 L |
| 2,500 (BE) | ₹12.50 L | ₹12.50 L | ₹0 |
| 3,750 | ₹18.75 L | ₹16.25 L | ₹2.50 L |
| 5,000 | ₹25.00 L | ₹20.00 L | ₹5.00 L |
About the Break-Even Calculator
The Break-Even Calculator works out how many units a business has to sell — and the revenue that represents — before it has covered its fixed costs for the period, given a selling price and a variable cost for each unit. Below that volume the period runs at a loss; above it, every further unit adds its contribution straight to profit.
Enter the fixed costs for the period (rent, salaries, insurance and anything else that does not move with how much you sell), the selling price per unit, and the variable cost per unit (materials, packaging, per-unit shipping and anything else that scales directly with each unit made or sold). Every unit sold contributes the difference between its price and its variable cost toward the fixed costs first, and toward profit only once those are fully covered.
"Contribution per unit" is that difference. "Contribution margin" states the same thing as a percentage of the selling price — what remains out of every ₹100 of sales once variable costs are paid. "Break-even units" is how many units exactly cover the fixed costs, at zero profit and zero loss. "Break-even revenue" is that same point expressed in rupees of sales. The ledger below the result shows revenue, total cost and profit at five sales volumes — nothing sold, half break-even, break-even, half again and double — so the point where the sign of the profit column flips is the crossing itself, row by row.
If the selling price does not exceed the variable cost per unit, there is no break-even volume at all: every unit loses money before the fixed costs are even reached, and selling more only loses more. The calculator shows "—" for the unit count and the revenue in that case rather than a negative or infinite figure. This is a single-product, single-period model: it assumes one price, one variable cost and fixed costs that stay fixed across the whole volume range, none of which holds indefinitely in a real business.
Frequently asked questions
How is the break-even point calculated?
Break-even units = Fixed costs ÷ (Selling price per unit − Variable cost per unit). The denominator is the contribution per unit — what one sale leaves behind after paying its own variable cost. Break-even revenue is that unit count multiplied by the selling price.
What is the difference between fixed and variable costs?
Fixed costs do not change with sales volume over the period — rent, salaries, insurance, software subscriptions. Variable costs move directly with each unit made or sold — raw materials, packaging, per-unit freight, sales commission. Costs that are partly both (a phone bill with a fixed line rental and metered usage) have to be split before they are entered here.
What does contribution margin mean?
It is the contribution per unit expressed as a percentage of the selling price: (Price − Variable cost) ÷ Price × 100. At a 40% contribution margin, ₹40 out of every ₹100 of sales is left after variable costs to put toward fixed costs, and then toward profit. It is a property of the product's own pricing, and it does not change with volume.
Why does the calculator show "—" instead of a break-even?
Because the selling price entered is at or below the variable cost per unit. When that is true the contribution per unit is zero or negative, so no volume — however large — ever recovers the fixed costs. An infinite or negative unit count would read like an answer, so the page shows the em dash and the takeaways state the condition instead.
How do I use break-even to work out a target profit?
Add the profit you want to the fixed costs and divide by the same contribution per unit: (Fixed costs + Target profit) ÷ Contribution per unit. This calculator computes the zero-profit case, so the ledger's 1½× and 2× rows show what the extra volume above break-even produces at these numbers.
Does break-even account for tax or interest?
No. The figures here are pre-tax and pre-interest — an operating break-even on the fixed and variable costs entered. Loan interest, tax on profit and non-operating income are outside the model, so a business at this break-even volume is covering its operating costs, not necessarily every claim on the period.
Disclaimer: This calculator is for information and education only. It is not investment advice and not a recommendation, and it is not business or accounting advice. The figures follow from the prices, costs, rates and volumes you entered, and actual results vary. Every figure is computed solely by applying the formula and assumptions stated on this page to the inputs you entered.