ToolFoxBreak-Even Calculator
Find the number of units and revenue a business needs to cover its fixed costs, given price and variable cost per unit.
- Break-even units
- 5,000
- Break-even revenue
- ₹1,25,000
How it works
Every unit sold contributes (Price − Variable cost) toward covering fixed costs; once enough units have been sold to cover those fixed costs entirely, the business breaks even. Break-even units = Fixed costs ÷ (Price − Variable cost per unit); break-even revenue is that many units multiplied by the selling price. If the selling price does not exceed the variable cost, no volume of sales can ever cover fixed costs, so the result is undefined.
Example
With ₹50,000 in fixed costs, a ₹25 selling price and ₹15 variable cost per unit, each unit contributes ₹10 toward fixed costs, so break-even is ₹50,000 ÷ ₹10 = 5,000 units, generating ₹1,25,000 in revenue at that point.
Frequently asked questions
What counts as a fixed cost?
Costs that do not change with sales volume — rent, salaries, insurance, loan EMIs on equipment — as opposed to variable costs like raw materials that scale with each unit produced.
What if the price is lower than the variable cost?
Each sale then loses money regardless of volume, so break-even is impossible — the calculator flags this instead of showing a meaningless number.
Does break-even mean the business is profitable?
No — break-even means zero profit and zero loss. Every unit sold beyond the break-even point contributes pure profit (before tax).
Are one-time setup costs included?
Only if you include them in "fixed costs" for the period you are analyzing — the calculator treats whatever figure you enter as the total fixed cost to recover.
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