Breakeven Point Calculator

Breakeven Cost Calculator
Calculate your total fixed costs
Fixed costs are costs that do not change with sales or volume because they are based on time. For this calculator the time period is calculated monthly.
Choose your Currency
Do you know the total of your monthly fixed costs?
Total monthly fixed costs
Enter the sum of all known fixed costs:
$
Amortization
Amount paid per month on loan payments with interest and terms:
$
Rent
Amount paid per month on planned rent payments to term:
$
Insurance
Amount paid per month on any agreed upon insurance costs:
$
Salaries
Amount paid per month for yearly or termed salaried employees:
$
Utilities
Amount paid per month on utility costs that do not change based on usage:
$
Depreciation
Amount paid per month on asset purchase cost minus salvage value:
$
Interest Expense
Amount paid per month on additional cost incurred from borrowed funds:
$
Property Taxes
Amount paid per month on taxes incurred from business owned property:
$
Other Monthly Costs
Amount paid per month on other fixed costs such as website hosting, e-commerce, and online payments:
$
Other Fixed Costs
Amount paid per month on any additional fixed costs not accounted for previously:
$
Total Fixed Cost
$
FAQs
What are fixed costs?
Fixed costs are expenses that do not change with the level of production or sales. These costs remain constant regardless of the number of units produced or sold. Examples include rent, salaries, insurance, and depreciation.
How do I identify my fixed costs?
To identify your fixed costs, list all expenses that remain the same each month regardless of your business activity. Common fixed costs include:
  • Rent or mortgage payments
  • Salaries and wages (not including commissions)
  • Insurance premiums
  • Depreciation on equipment
  • Utilities (if they are relatively constant)
  • Property taxes
  • Loan repayments
How can I calculate my total fixed costs?
To calculate your total fixed costs, follow these steps:
  1. List all fixed expenses your business incurs monthly.
  2. Add up all these fixed expenses to get the total fixed costs.
What should I do if my fixed costs vary slightly each month?
If your fixed costs vary slightly each month, take an average over a period (e.g., six months or a year) to get a more accurate figure. This average will help smooth out any minor fluctuations and give you a reliable estimate for your calculations.
Calculate your total Initial Investment (Optional)
Initial Investments will use, how long it will take to reach the break-even point
Total Investment Cost
Total initial investment cost which you’ve made in begining.
$
Total Unit
Total number of unit which you’ve purchased in begining.
Unit
Total Initial Investment
$
FAQs
What is an initial investment?
An initial investment is the total amount of money required to start your business. This includes all the upfront costs needed to get your business up and running before you begin generating revenue. These costs typically cover things like purchasing equipment, securing a location, and initial inventory.
How do I calculate my total initial investment?
To calculate your total initial investment, follow these steps:
  1. List all the one-time startup costs, such as equipment, furniture, and renovations.
  2. Include any deposits or advance payments for rent, utilities, and services.
  3. Add the cost of initial inventory, supplies, and marketing materials.
  4. Sum up all these expenses to get your total initial investment.
What are some common components of an initial investment?
Common components of an initial investment include:
  • Equipment and machinery: Costs for any tools, machines, or technology required for operations.
  • Property costs: Initial rent, lease deposits, or purchase costs for your business location.
  • Inventory: The cost of initial stock or materials needed to start operations.
  • Licenses and permits: Fees for obtaining the necessary legal permissions to operate.
  • Marketing: Initial costs for advertising, promotional materials, and branding.
  • Professional fees: Payments for legal, accounting, or consulting services.
  • Renovations and setup: Costs for modifying or setting up your business space to suit your needs.
Estimate your selling price per unit
Calculate the price at which your unit or service will sell to customers.
Per unit selling price
Enter the price you plan to sell per unit or service:
$
FAQs
Why is it important to estimate the selling price per unit?
Estimating the selling price per unit is crucial because it directly affects your revenue and profitability. The selling price must cover your costs and provide a margin for profit. Accurately setting this price ensures you can reach your break-even point and achieve financial goals.
How do I determine the appropriate selling price per unit?
To determine the appropriate selling price per unit, consider the following steps:
  1. Calculate total costs per unit: Add both variable costs (costs that change with production volume) and fixed costs allocated per unit.
  2. Research the market: Analyze competitor pricing and understand the market demand and customer willingness to pay.
  3. Set a profit margin: Decide on the profit margin you aim to achieve and add this to your total costs per unit.
  4. Test and adjust: Initially set your price, then monitor sales and customer feedback, and adjust as necessary.
What factors should I consider when estimating my selling price per unit?
When estimating your selling price per unit, consider these factors:
  • Production costs: Ensure all costs involved in producing your product, including materials, labor, and overhead, are covered.
  • Market conditions: Understand the current market trends, demand, and competitor pricing.
  • Value proposition: Reflect the perceived value of your product to customers, which can allow for a higher price if your product offers unique benefits.
  • Customer demographics: Consider the purchasing power and price sensitivity of your target market.
  • Profit goals: Ensure the selling price supports your desired profit margins and business sustainability.
Estimate your expected unit sales
Establish the number of units your business is expected to sell
Monthly Number of units to sell
Enter the number of units or services you expect to sell
Unit
FAQs
Why is it important to estimate expected unit sales?
Estimating expected unit sales is crucial because it helps you project future revenue and determine if your business can reach its break-even point and profitability goals. Accurate sales forecasts also guide inventory management, production planning, and financial planning.
How can I estimate my expected unit sales?
To estimate your expected unit sales, follow these steps:
  1. Market Research: Conduct market research to understand the demand for your product. This can include surveys, analyzing industry reports, and studying competitors.
  2. Historical Data: Use past sales data if available to identify trends and patterns that can help predict future sales.
  3. Sales Channels Analysis: Evaluate the potential sales from each channel (e.g., online, retail, wholesale) based on past performance and market conditions.
  4. Seasonality and Trends: Consider seasonal fluctuations and market trends that could affect sales volumes at different times of the year.
What factors should I consider when estimating my expected unit sales?
When estimating your expected unit sales, consider these factors:
  • Target Market Size: The total number of potential customers who might buy your product.
  • Market Penetration Rate: The percentage of the target market you expect to capture based on your marketing and sales efforts.
  • Competitor Analysis: Understand the market share held by competitors and how your product compares in terms of price, quality, and features.
  • Marketing Strategies: The effectiveness of your marketing campaigns and promotions in driving sales.
  • Economic Conditions: Current economic conditions that could influence consumer spending behavior and demand for your product.
Calculate your total variable costs per unit
Variable costs are costs that change with sales or volume. They are based on the production of one unit.
Do you know your variable cost per unit?
Total monthly variable costs
Enter the sum of all known variable costs
$
Direct Materials
Raw materials used in the creation of one unit:
$
Piece Rate Labor
The amount paid to workers for one unit completed:
$
Production Supplies
Maintenance supplies for production variable machinery per unit:
$
Commissions
Cost paid to salespeople if they sell a unit of products or services:
$
Freight Out
Shipping cost per unit if the company sells and ships out one product:
$
Other Variable Costs
Additional variable costs per unit that are not included above:
$
Total Variable Cost
$
FAQs
What are variable costs?
Variable costs are expenses that change in direct proportion to the number of units produced or sold. Unlike fixed costs, which remain constant regardless of production levels, variable costs fluctuate with the volume of output. Examples include raw materials, direct labor, and shipping costs.
How do I calculate the total variable costs per unit?
To calculate the total variable costs per unit, follow these steps:
  1. Identify all variable costs: List all expenses that vary with production volume, such as raw materials, direct labor, packaging, and shipping.
  2. Sum the total variable costs: Add up all the identified variable costs for a given production period.
  3. Divide by the number of units produced: Take the total variable costs and divide them by the number of units produced in that period. This gives you the variable cost per unit.
What factors should I consider when calculating variable costs per unit?
When calculating variable costs per unit, consider the following factors:
  • Raw Materials: The cost of materials needed to produce each unit. Ensure you account for bulk purchasing discounts if applicable.
  • Direct Labor: Wages paid to workers directly involved in the production process. Include overtime or incentive payments if they apply to your production model.
  • Packaging and Shipping: Costs associated with packaging materials and shipping each unit to customers. This can vary depending on the shipping method and destination.
  • Production Efficiency: The efficiency of your production process. Inefficiencies or wastage can increase variable costs.
  • Supplier Pricing: Any changes in supplier pricing for materials or components that could affect your overall variable costs.
Break-Even Point Results
Your Break-Even Point Results
Estimated calculation based on your inputs
Break-Even Units Sold
8
needed to sell in order to cover your costs
If you sell your anticipated
1,500 units
your profit will be
$597,000
Unit Sales
$30
The price at which the sale must be made to break even.
$3,750
revenue dollars needed to break even
Contribution margin ratio
80%
You will need to sell 6,940 more to break even
Break-Even Profile
# of units 100
Unit
Price Per Unit 100
$
Fixed Costs 5000
$
Variable Costs 20
$
Initial Cost 20
$
$
Unit
Break-Even Point In Time
Summary
You will reach the break-even point in about
8.83 months.
This equates to approximately
265 days
(assuming 30 days per month on average).
These calculations provide an estimate and assume a constant rate of sales and costs over time, without accounting for factors such as seasonality or changes in market conditions.
Break-Even Point Graph
Graphical representation of your inputs. Click or tap in the graph for detailed values.
Break-Even Point Unit Sales
Units Sold Profit Unit Sales Variable Costs Fixed Costs Total Costs
Row 1 Data 1 Row 1 Data 2 Row 1 Data 3 Row 1 Data 4 Row 1 Data 5 Row 1 Data 6
Next Steps
Print this dashboard for your reference to add to your business plan or to share with a consultant.
FAQs
What does the break-even point result mean?
The break-even point result indicates the number of units you need to sell to cover all your fixed and variable costs. At this point, your total revenue equals your total costs, meaning you are not making a profit or a loss. Selling more than this number of units will lead to a profit, while selling fewer will result in a loss.
How can I use the break-even point to make business decisions?
You can use the break-even point to:
  • Set Sales Targets: Determine the minimum sales volume needed to avoid losses.
  • Pricing Strategies: Assess whether your current pricing covers costs and helps achieve profitability.
  • Cost Management: Identify opportunities to reduce fixed or variable costs to lower the break-even point.
  • Financial Planning: Develop realistic financial projections and budgets based on the break-even analysis.
What if my break-even point is higher than expected?
If your break-even point is higher than expected, consider the following actions:
  • Increase Prices: Evaluate if you can raise your selling price without significantly affecting demand.
  • Reduce Costs: Look for ways to cut down on fixed and variable costs, such as negotiating with suppliers or improving operational efficiencies.
  • Boost Sales Volume: Implement marketing and sales strategies to increase the number of units sold.
  • Product Mix: Assess if changing your product mix can lead to higher margins and a lower break-even point.