About break-even calculator
The break-even point is the number of units you must sell to cover all your costs. Beyond it you make a profit.
Formula
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With fixed costs of ₹60,000, a price of ₹500 and a variable cost of ₹300, you need 300 units.
Using it
- Check whether the break-even volume is realistic for your market.
- Raising the price or cutting costs lowers the target.
- Add a target profit to find the sales needed to reach it.
Another worked example
A business with fixed costs of ₹90,000 a month sells a product for ₹250 that costs ₹150 to make. Each sale contributes ₹100, so it breaks even at 900 units. To earn ₹30,000 profit it needs (90,000 + 30,000) ÷ 100 = 1,200 units.
Improving the position
Raise the price, cut the variable cost, or lower fixed costs such as rent. Even small changes to the contribution per unit move the break-even point a lot.
