Break-Even Analysis

Required Inputs

Fixed Costs (Monthly)

Rent, salaries, insurance, etc.

Variable Cost Per Unit

Materials, labor per unit, etc.

Selling Price Per Unit

Optional Inputs

Target Monthly Profit

Desired profit above break-even

Current Monthly Sales (Units) For comparison purposes

Break-Even Analysis

Break-Even Units

Break-Even Revenue

Contribution Margin

Contribution Margin %

Units for Target Profit

Current Status

Sales Volume Analysis

Units Sold	Revenue	Fixed Costs	Variable Costs	Total Costs	Profit/Loss

Understanding Break-Even Analysis

What is Break-Even Point?

The break-even point is where total revenue equals total costs. At this point, your business is neither making a profit nor a loss. Understanding this helps you set sales targets and price products.

Key Terms

Fixed Costs: Expenses that don't change with production volume (rent, salaries)
Variable Costs: Expenses that increase with each unit produced (materials, labor)
Contribution Margin: Selling price minus variable cost per unit
Break-Even Formula: Fixed Costs ÷ Contribution Margin = Break-Even Units

How to Use This Analysis

Set realistic sales targets based on break-even requirements
Determine pricing strategy - higher prices reduce break-even units needed
Identify opportunities to reduce fixed or variable costs
Evaluate new product launches or business ventures
Make informed decisions about expanding operations

Ways to Lower Break-Even Point

Reduce fixed costs (negotiate rent, outsource non-core functions)
Lower variable costs (find cheaper suppliers, improve efficiency)
Increase selling price (add value, improve brand positioning)
Improve contribution margin through better cost management

Break-Even Calculator

Break-Even Analysis

Required Inputs

Optional Inputs

Break-Even Analysis

Sales Volume Analysis

Understanding Break-Even Analysis

What is Break-Even Point?

Key Terms

How to Use This Analysis

Ways to Lower Break-Even Point