function calculateBreakEven() {
var fixedCostsInput = document.getElementById("fixedCosts").value;
var varCostInput = document.getElementById("varCostPerUnit").value;
var priceInput = document.getElementById("salesPricePerUnit").value;
var resultBox = document.getElementById("beResult");
var errorBox = document.getElementById("beError");
// Reset display
resultBox.style.display = "none";
errorBox.style.display = "none";
errorBox.innerHTML = "";
// Validation
if (fixedCostsInput === "" || varCostInput === "" || priceInput === "") {
errorBox.innerHTML = "Please fill in all fields.";
errorBox.style.display = "block";
return;
}
var fixedCosts = parseFloat(fixedCostsInput);
var varCost = parseFloat(varCostInput);
var price = parseFloat(priceInput);
if (isNaN(fixedCosts) || isNaN(varCost) || isNaN(price)) {
errorBox.innerHTML = "Please enter valid numbers.";
errorBox.style.display = "block";
return;
}
if (price <= varCost) {
errorBox.innerHTML = "Selling price must be higher than variable cost per unit to generate a profit.";
errorBox.style.display = "block";
return;
}
// Calculations
var contributionMargin = price – varCost;
var breakEvenUnits = fixedCosts / contributionMargin;
var breakEvenRevenue = breakEvenUnits * price;
// Formatting
var formattedMargin = "$" + contributionMargin.toFixed(2);
var formattedUnits = Math.ceil(breakEvenUnits).toLocaleString() + " Units";
var formattedRevenue = "$" + breakEvenRevenue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Display Results
document.getElementById("displayMargin").innerHTML = formattedMargin;
document.getElementById("displayUnits").innerHTML = formattedUnits;
document.getElementById("displayRevenue").innerHTML = formattedRevenue;
resultBox.style.display = "block";
}
Understanding Your Break-Even Point
For any business owner, entrepreneur, or financial manager, knowing the Break-Even Point (BEP) is critical for survival and growth. This metric identifies the precise moment where your total revenue equals your total costs. At this point, the business is neither making a profit nor a loss.
Our Break-Even Point Calculator helps you determine exactly how many units of a product or service you need to sell to cover your operating costs. Once you surpass this number, every additional sale contributes directly to profit.
Why This Calculation Matters
Pricing Strategy: Helps determine if your current pricing allows for a sustainable profit margin.
Risk Assessment: Shows how many sales are required to avoid losing money before launching a new product.
Goal Setting: Provides a clear sales target for your marketing and sales teams.
The Break-Even Formula
The logic used in this calculator is based on the standard accounting formula for break-even analysis:
Break-Even Units = Total Fixed Costs / (Selling Price per Unit – Variable Cost per Unit)
The denominator (Selling Price – Variable Cost) is known as the Contribution Margin. It represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.
Real-World Example
Let's say you are running a boutique coffee roastery. Here is how you would use the calculator:
Fixed Costs: $5,000 per month (Rent, Equipment Loan, General Utilities).
Variable Cost: $6.00 per bag of coffee (Beans, Packaging, Labeling).
Selling Price: $16.00 per bag.
First, calculate the Contribution Margin: $16.00 – $6.00 = $10.00 per bag.
Next, divide Fixed Costs by the margin: $5,000 / $10.00 = 500 Units.
You must sell 500 bags of coffee every month just to cover your costs. Your 501st bag sold represents your first $10 of actual profit.
How to Lower Your Break-Even Point
If the calculator shows a number that seems unachievable, you have three levers to pull:
Reduce Fixed Costs: Negotiate rent or reduce overhead expenses.
Reduce Variable Costs: Find cheaper suppliers or improve production efficiency.
Increase Prices: Raise the selling price, provided the market will sustain it.