Break-Even Analysis Calculator
What is a break-even analysis calculator?
It is very important for the success of a business to know when it will break even. A break-even point is a point at which the revenue from sales equals the costs of producing and selling a product or service.
Knowing when a business will reach “break-even” can help with budgeting and making decisions.
Our break-even analysis calculator is a simple, easy-to-use tool that businesses and individuals can use to quickly and easily figure out their break-even points.
The calculator needs three inputs: fixed costs, variable costs per unit, and price per unit. With these numbers, the calculator will figure out how many units need to be sold before the break-even point is reached.
Formula:
The formula for calculating the break-even point is as follows:
Break-even point = Fixed Costs / (Price per Unit – Variable Costs per Unit)
Example:
Let’s say a business has fixed costs of $30,000, variable costs per unit of $20, and a price per unit of $25. Using the formula above, we can calculate the break-even point as follows:
Break-even point = $30,000 / ($25 – $20) = $30,000 / $5 = 6,000 units
This means that the company must sell 6,000 units in order to reach the break-even point and begin making a profit.
How to use a break-even analysis calculator
To use the calculator, just put in the fixed costs, variable costs per unit, and price per unit, then click the “Calculate” button.
Then, the calculator will figure out how many units need to be sold to reach the break-even point. This number will be shown on the screen.
In addition to using a calculator, it’s important to know what fixed costs and variable costs are. Fixed costs are expenses like rent, salaries, and insurance that don’t change no matter how many units are made.
Variable costs, on the other hand, change as goods or services are made. These include the cost of raw materials, labor, and manufacturing, among other things.
