Break-Even Calculator
Know your numbers. Determine the number of units you need to sell to cover all your expenses.
Rent, salaries, software, etc.
Materials, shipping, labor per item.
Units to Sell
34
items to break even
Break-Even Revenue
$1,666.67
Contribution Margin
$30.00
per unit sold
What is a Break-Even Point?
The break-even point is the stage at which your total revenue equals your total expenses. At this point, your business is neither making a profit nor a loss. Knowing your break-even point is crucial for setting prices and sales targets.
How to Calculate Break-Even Units
The formula for break-even units is:
Break-Even Units = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
By understanding your fixed costs (like rent and salaries) and your variable costs (like materials and shipping), you can determine exactly how much you need to sell to stay afloat.
Why Do You Need a Break-Even Analysis?
- Pricing Strategy: Ensure your prices cover all costs and provide a healthy margin.
- Risk Assessment: Understand how a decrease in sales or an increase in costs affects your bottom line.
- Financial Planning: Use the data to secure loans or investment.
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