Break-even Calculator
Units and revenue needed to cover costs, with contribution margin and margin of safety.
Inputs
Rent, salaries, insurance — per period
Formula
- Contribution per unit = Price − Variable cost
- Contribution margin = Contribution / Price × 100
- Break-even units = Fixed costs / Contribution per unit
- Break-even revenue = Break-even units × Price
- Units for target profit = (Fixed costs + Target profit) / Contribution per unit
- Margin of safety = (Expected − Break-even) / Expected × 100
Every unit sold contributes its price minus its variable cost towards fixed costs. Once accumulated contribution equals fixed costs the business breaks even; beyond that, each additional unit's contribution drops straight to operating profit. A low contribution margin means the break-even volume is highly sensitive to price cuts — a 10% discount on a 40% margin business requires a 33% volume increase just to stand still.
Step-by-step calculation
- 1
Contribution per unit
1,200.00 − 700.00
₹500.00
- 2
Contribution margin
500.00 / 1,200.00 × 100
41.7%
- 3
Break-even units
500,000 / 500.00
1,000.0
- 4
Break-even revenue
units × 1,200.00
₹1,200,000
- 5
Target-profit units
(500,000 + 200,000) / 500.00
1,400.0
Assumptions
- Selling price and variable cost per unit stay constant across the volume range.
- Fixed costs are genuinely fixed within the relevant range.
- Single product or a stable sales mix.
- Production equals sales; no inventory build-up.
Tips
- Track break-even monthly — it moves the moment you hire or sign a lease.
- Improving contribution margin by 5 points usually beats chasing volume.
- A margin of safety below 20% leaves little room for a demand shock.
Warnings
- Semi-variable costs (utilities, commissions) distort a pure fixed/variable split.
- Break-even is a cash-blind measure — a profitable plan can still run out of working capital.
Standards & references
- Cost-Volume-Profit (CVP) analysis
- CIMA management accounting principles
Frequently asked questions
What does the Break-even Calculator do?
Units and revenue needed to cover costs, with contribution margin and margin of safety. The Break-even Calculator on OneCalcApp returns the result instantly as you type, together with the formula and the substituted values.
How do I use the Break-even Calculator?
Enter your values in the input fields, choose the relevant units or options, and the Break-even Calculator recalculates automatically. You can copy, print or export the result.
Is the Break-even Calculator free to use?
Yes. The Break-even Calculator is completely free, needs no sign-up and has no usage limit on OneCalcApp.
How accurate is the Break-even Calculator?
It uses the standard formula Contribution per unit = Price − Variable cost and full double-precision arithmetic, so results match a manual calculation to the displayed number of digits.
Does the Break-even Calculator work on mobile and offline?
Yes. The Break-even Calculator runs entirely in your browser on phones, tablets and desktops, and your inputs never leave your device.
Where can I find related tools?
OneCalcApp hosts 300+ calculators and converters, including the full Business collection. Related tools are linked at the bottom of every page.
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