Calculate exactly how many units you need to sell to cover your costs.
Please ensure the Selling Price is higher than the Variable Cost.
Break-Even Analysis Results:
You need to sell: 0 units
Break-even Sales Revenue: $0.00
Contribution Margin: $0.00 per unit
Understanding the Break-Even Point (BEP)
The break-even point is the crucial moment in business where your total revenue exactly matches your total expenses. At this stage, your business is making zero profit, but more importantly, it is incurring zero loss. Every unit sold after this point contributes directly to your profit margin.
The Break-Even Formula
The calculation used in this tool is the standard accounting formula:
Break-Even Point (Units) = Fixed Costs รท (Price per Unit – Variable Cost per Unit)
Fixed Costs: These are expenses that remain the same regardless of how much you sell (e.g., rent, administrative salaries, property taxes).
Variable Costs: These costs fluctuate directly with production volume (e.g., raw materials, packaging, direct shipping costs).
Contribution Margin: This is the Selling Price minus the Variable Cost. It represents the amount of money from each sale that "contributes" to paying off fixed costs.
Real-World Example
Imagine you are starting a candle-making business:
Fixed Costs: $1,200 (Equipment lease and website hosting)
Selling Price: $25 per candle
Variable Cost: $10 (Wax, wick, jar, and shipping)
Your contribution margin is $15 ($25 – $10). To find your break-even point: $1,200 / $15 = 80 candles. You must sell 80 candles to cover your costs. The 81st candle represents your first dollar of profit.
Why This Matters for Your Strategy
Performing a break-even analysis helps you make informed decisions about pricing and cost management. If your break-even number is too high (e.g., you can't realistically sell that many units in a month), you have three options: raise your prices, find ways to lower your variable costs, or reduce your fixed overhead.
function calculateBreakEven() {
var fixedCosts = parseFloat(document.getElementById("fixedCosts").value);
var pricePerUnit = parseFloat(document.getElementById("pricePerUnit").value);
var variableCost = parseFloat(document.getElementById("variableCost").value);
var errorDiv = document.getElementById("errorMessage");
var resultDiv = document.getElementById("calcResult");
// Reset display
errorDiv.style.display = "none";
resultDiv.style.display = "none";
// Validation
if (isNaN(fixedCosts) || isNaN(pricePerUnit) || isNaN(variableCost)) {
alert("Please enter valid numbers in all fields.");
return;
}
if (pricePerUnit <= variableCost) {
errorDiv.style.display = "block";
return;
}
// Calculations
var contributionMargin = pricePerUnit – variableCost;
var breakEvenUnits = Math.ceil(fixedCosts / contributionMargin);
var breakEvenRevenue = breakEvenUnits * pricePerUnit;
// Display Results
document.getElementById("unitsResult").innerHTML = breakEvenUnits.toLocaleString();
document.getElementById("revenueResult").innerHTML = "$" + breakEvenRevenue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("marginResult").innerHTML = "$" + contributionMargin.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.style.display = "block";
}