liminfoBreak-Even Calculator
Free web tool: Break-Even Calculator
Business Presets
Presets are based on average Korean small business costs. Feel free to adjust.
Contribution Margin
20,000
CM Ratio
40.0%
BEP Quantity
500 units
BEP Revenue
25,000,000
Margin of Safety
50.0%
Est. Monthly Profit
+10,000,000
Break-Even Chart
Price Sensitivity Analysis
| Price Change | BEP Units | BEP Revenue | Change |
|---|---|---|---|
| -20% | 1,000 | 40,000,000 | +100.0% |
| -10% | 667 | 30,015,000 | +33.4% |
| 0% | 500 | 25,000,000 | Current |
| +10% | 400 | 22,000,000 | -20.0% |
| +20% | 334 | 20,040,000 | -33.2% |
Profit Target Calculator
Required Monthly Sales
63 units
Required Monthly Revenue
3,150,000
About Break-Even Calculator
The Break-Even Calculator is a business finance tool that determines the minimum sales volume needed to cover all costs — the break-even point (BEP). At break-even, total revenue equals total costs and the business neither profits nor loses. The core formulas are: Contribution Margin (CM) = Selling Price − Variable Cost per Unit; Break-Even Units = Fixed Costs ÷ Contribution Margin; Break-Even Revenue = Break-Even Units × Selling Price. This calculator also computes the Contribution Margin Ratio (CM ÷ Selling Price × 100) and the Margin of Safety when a current sales volume is provided.
Entrepreneurs launching new products, small business owners setting prices, financial analysts evaluating investment viability, and MBA students studying managerial accounting all rely on break-even analysis. Understanding BEP helps determine whether a business idea is financially viable, guides pricing decisions, sets realistic sales targets, and identifies how much room exists between current sales and the point of loss. A high margin of safety (current volume significantly above BEP) indicates a robust, resilient business; a low margin signals vulnerability to sales downturns.
This tool accepts four inputs: fixed costs (rent, salaries, depreciation — costs that do not change with volume), variable cost per unit (raw materials, direct labor, packaging — costs that scale with each unit sold), selling price per unit, and optionally the current sales volume. Results include contribution margin per unit, contribution margin ratio, break-even quantity (rounded up to whole units), break-even revenue, and margin of safety percentage. All calculations are performed instantly in the browser with no data stored or transmitted.
Key Features
- Calculates break-even point in units using BEP = Fixed Costs ÷ Contribution Margin
- Computes break-even revenue (BEP Units × Selling Price)
- Shows contribution margin per unit (Selling Price − Variable Cost)
- Displays contribution margin ratio as a percentage of selling price
- Calculates margin of safety when current sales volume is entered
- Validates that selling price exceeds variable cost before computing
- Real-time updates as any input changes — no submit button needed
- 100% client-side processing — business data never leaves your browser
Frequently Asked Questions
What is the break-even point?
The break-even point (BEP) is the sales volume at which total revenue exactly equals total costs — fixed plus variable. Below BEP the business operates at a loss; above BEP it generates profit. BEP in units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). BEP in revenue = BEP units × Selling Price.
What is contribution margin?
Contribution margin (CM) is the amount each unit sold contributes toward covering fixed costs and generating profit, calculated as Selling Price − Variable Cost per Unit. For example, if you sell a product for $50 and the variable cost is $30, the contribution margin is $20 per unit. Once total contribution margin equals fixed costs, you have reached break-even.
What is the contribution margin ratio?
The contribution margin ratio (CM ratio) is the contribution margin expressed as a percentage of selling price: CM ÷ Selling Price × 100. A CM ratio of 40% means that for every $1 of revenue, $0.40 goes toward covering fixed costs and profit. Higher CM ratios indicate greater profitability per dollar of sales.
What is the margin of safety?
The margin of safety measures how far current sales exceed the break-even point, expressed as a percentage: (Current Sales Volume − BEP Units) ÷ Current Sales Volume × 100. A margin of safety of 25% means sales can drop 25% before the business starts losing money. It quantifies the buffer against revenue declines.
What are fixed costs vs. variable costs?
Fixed costs do not change with production volume — examples include rent, insurance, salaries of permanent staff, and equipment depreciation. Variable costs change directly with each unit produced or sold — examples include raw materials, packaging, direct labor wages, and sales commissions. This distinction is the foundation of break-even analysis.
How do I lower my break-even point?
You can lower BEP by: (1) reducing fixed costs (moving to a smaller facility, renegotiating leases), (2) reducing variable costs per unit (finding cheaper suppliers, improving production efficiency), or (3) increasing the selling price, which raises the contribution margin. Increasing volume alone does not lower BEP — it only moves you faster toward or past it.
Can break-even analysis handle multiple products?
This calculator is designed for single-product or single-product-equivalent analysis. For multi-product businesses, a weighted average contribution margin approach is used: weight each product's CM by its sales mix percentage to compute a blended CM, then apply the standard BEP formula. Multi-product BEP requires additional assumptions about product mix.
What is the difference between break-even and profitability?
Break-even is the point of zero profit — revenues exactly cover costs. Profitability begins above break-even. To target a specific profit amount, add the desired profit to fixed costs before dividing: Target Units = (Fixed Costs + Target Profit) ÷ Contribution Margin. This gives the sales volume needed to achieve that profit goal.