What is the Break Even Point and the Break Even Calculator
The break even calculator calculates the break even point which is how many units of a product must be sold to make a profit. This analysis is especially useful for sales in small businesses, online stores, retail stores and other businesses that sell products and are required to maintain inventory.
Break Even Calculator
To calculate the break even point just do the following steps:
- Input the required data: fixed cost (including closing costs if any), variable cost per unit, selling price per unit and expected unit sales.
- Click on Calculate to view report.
- Get the results:
- A summary of the input data
- A detail of the break even analysis calculation
- A chart with all the calculation in detail.
|SUMMARY AND RESULTS|
- Break even analysis: It is a tool used by businesses to determine the level of sales needed in order to reach the break even point. The calculator can also be used to determine the level of sales needed in order to achieve a specific profit. The calculator displays the results graphically to allow you to visualize the break even point.
- Fixed costs – The sum of all costs required to produce any product. This amount does not change as production increases or decreases, even with 0 units.
- Variable unit cost – Cost associated with producing an additional unit.
- Expected unit sales – The number of units that are expected to be sold.
- Price – Price you will be able to receive per unit.
- Total variable costs – The product of units produced and variable unit cost (example 10 units at $5 variable cost produces a total variable cost of $50).
- Total costs – Sum of fixed costs and variable costs.
- Total revenue – Product of price and expected sale unit sales (example 10 units at $10 equals $100 total revenue).
- Profit – Total revenue minus total costs.
- Break even point – Number of units required to sell to make a profit of zero.
Which is the Break Even sales Formula?
In sales it is used to calculate the number of units required to sell and make a Zero profit.
The formula is as follows:
Break Even = Fixed Costs / (sell unit price – variable unit cost)
From this formula one can also calculate fixed costs:
Fixed Costs = Break Even / (Sell Unit price – variable unit cost).
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