Break-Even Point Calculator
Know exactly how many units you need to sell to keep the lights on.
What this calculator does
The Break-Even Point (BEP) dictates the exact volume of sales required to cover all fixed and variable costs, meaning your net profit is perfectly zero. If you sell below the BEP, you bleed money; sell above it, and you turn a profit. Before launching a new product or signing a retail lease, you must crunch this number. If the required units are unrealistically high for your market size, the business model needs tweaking. Input your monthly fixed overheads, unit price, and variable unit costs to instantly determine your BEP volume, equivalent revenues, and safety margins.
Formula & how it works
BEP Units = Fixed Costs ÷ (Unit Price − Variable Cost). BEP Revenue = BEP Units × Unit Price. Contribution Margin = (Price − Variable) ÷ Price.
Worked examples
- A cafe pays 2,500 monthly rent. Selling coffee for 4.00 with a 1.20 cost for beans and cups yields a BEP of 893 cups per month—about 30 a day.
- By increasing the price slightly to 4.50 (while costs remain 1.20), the BEP drops to 757 cups per month.
Frequently asked questions
- What should be included in fixed costs?
- Anything that does not fluctuate with production volume. This includes software subscriptions, rent, fixed employee salaries, business insurance, and equipment depreciation.
- Why does the Contribution Margin matter?
- A higher contribution margin means each extra unit sold generates disproportionately more net profit once the break-even hurdle is cleared. Use it to prioritize your product lineup.