Reviewed by: David Chen, CFA • Education Specialist
Master your business math with our professional Break-Even Point Calculator. Designed for high school students and young entrepreneurs, this tool helps you find the exact point where your revenue covers all costs, or solve for missing variables like Price, Quantity, or Fixed Costs.
Break-Even Point Calculator
Leave one field blank to calculate its value.
Break-Even Point (BEP) Formula:
Or to find Quantity:
$$Q = \frac{F}{P – V}$$Source: Investopedia – Break-Even Point Guide
Variables Explained:
- Fixed Costs (F): Costs that do not change regardless of production (e.g., rent, insurance).
- Price per Unit (P): The amount you charge customers for one item.
- Variable Cost (V): The cost incurred for every unit produced (e.g., materials, labor).
- Quantity (Q): The number of units produced or sold.
What is the Break-Even Point?
The Break-Even Point (BEP) is a critical concept in high school business studies. It represents the production level at which total revenues exactly equal total expenses. At this point, a business is neither making a profit nor suffering a loss.
Understanding the BEP helps managers determine how many units they must sell to start generating profit, or how much they can lower prices while still covering their overhead costs.
How to Calculate BEP (Example)
- Identify your total Fixed Costs (e.g., $1,000).
- Determine your Selling Price per item (e.g., $50).
- Subtract the Variable Cost per item from the Price (e.g., $50 – $30 = $20 Contribution Margin).
- Divide Fixed Costs by the Contribution Margin ($1,000 / $20 = 50 units).
Frequently Asked Questions (FAQ)
What happens if I sell more than the BEP? Once sales exceed the break-even point, every additional unit sold contributes directly to the business’s net profit.
Why is variable cost important? Variable costs determine your “Contribution Margin.” If variable costs are higher than the price, you can never break even.
Can fixed costs change? While “fixed” in the short term, costs like rent can increase over time, requiring a new BEP calculation.
What is the “Margin of Safety”? This is the difference between your actual sales and the break-even sales, indicating how much sales can drop before you hit a loss.