Contents

## 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
- Other businesses that sell products and need to maintain inventory.

## Break Even Calculator online

To calculate the break even point online 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 |
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## How to calculate break even point

The break-even point is the point at which a company’s total revenues are equal to its total costs, and the company is neither making a profit nor a loss. The break-even point in units can be calculated using the following formula:

Break-Even Point = Total Fixed Costs / (Price – Variable Cost per Unit).

Meanings:

`Total Fixed Costs`

are the costs that do not vary with the number of units produced or sold, such as rent, salaries, and insurance`Price`

is the selling price per unit`Variable Cost per Unit`

is the cost of producing each unit, such as materials, labor, and other direct costs

To calculate the break-even point in units, you will need to have access to the company’s financial statements.

It will provide information on the company’s fixed costs, selling price, and variable costs per unit.

Once you have this information, you can use the formula above to find and calculate the break-even point.

The break-even point is a theoretical concept. A company’s actual break-even point may vary depending on a number of factors:

- Changes in the market,
- Changes in the company’s costs,
- Other external factors.

In order to make accurate business decisions, it’s important to:

- monitor the company’s financial performance
- make adjustments as needed to stay on track towards profitability.

There are several ways to calculate the break-even point, which is the point at which a company’s revenues equal its costs and it begins to make a profit. Here are some easy methods for calculating the break-even point:

- Use the formula: The most common way to calculate the break-even point is to use the formula:
`Break-even point = Fixed costs / (Price - Variable costs)`

. For example, if a company’s fixed costs are $10,000, its price is $20, and its variable costs are $10, the break-even point would be calculated like this:`Break-even point = $10,000 / ($20 - $10) = $10,000 / $10 = 1,000 units`

. - Use a calculator: You can use a calculator to quickly and easily calculate the break-even point. Simply enter the numbers into the formula and the calculator will give you the result.
- Use a spreadsheet program: If you have a spreadsheet program like Microsoft Excel, you can use it to calculate the break-even point. You can enter the numbers into the formula and then use the program’s built-in functions to find the result.
- Use an online calculator: There are many online calculators that you can use to calculate the break-even point. Simply enter the numbers into the formula and the calculator will give you the result.
- Use a pencil and paper: You can also use a pencil and paper to calculate the break-even point. Simply write down the numbers and then use the formula to find the result.
- Use a pencil and calculator: If you want to check your work or if you’re not confident in your mental math skills, you can use a pencil and calculator to calculate the break-even point. Write down the numbers and then use the calculator to find the result.
- Use a smartphone app: There are many smartphone apps that you can use to calculate the break-even point. These apps usually have a user-friendly interface and allow you to enter the numbers and then display the result.

## What is a break even analysis

A break-even analysis is a financial analysis to determine the point at which a company’s total revenues are equal to its total costs. So the company is neither making a profit nor a loss.

The break-even point is an important consideration for businesses. It represents the point at which the company is able to cover its costs and begin to generate a profit.

To conduct a break-even analysis, a company will need to have access to its financial statements. It will provide information on the company’s fixed costs, selling price, and variable costs per unit.

The company can then use this information to calculate its break-even point using the formula mentioned above.

This analysis can be a valuable tool for businesses. It allows them to understand the relationship between their costs, revenues, and profits. By identifying the break-even point, a company can set goals for increasing its sales and revenues. Also it can take steps to reduce its costs and improve its profitability.

It can also help a company make informed decisions about pricing, production, and other aspects of its operations.

### Analysis In Excel

To do a break-even analysis in Excel, you can use the following steps:

- Open a new Excel workbook and create a new worksheet.
- In the first row of the worksheet, create a column for each of the following:

- Total fixed costs
- Selling price per unit
- Variable cost per unit
- Number of units sold
- Total revenue
- Total variable costs
- Total profit or loss

- In the second row of the worksheet, enter the values for each of the columns. The total fixed costs, selling price per unit, and variable cost per unit should be entered as absolute values (i.e. not as formulas), as they are not expected to change.
- In the third row of the worksheet, create a formula to calculate the total revenue. The formula should be
`=B2*D2`

, where`B2`

is the selling price per unit and`D2`

is the number of units sold. - In the fourth row of the worksheet, create a formula to calculate the total variable costs. The formula should be
`=C2*D2`

, where`C2`

is the variable cost per unit and`D2`

is the number of units sold. - In the fifth row of the worksheet, create a formula to calculate the total profit or loss. The formula should be
`=E2-F2-A2`

, where`E2`

is the total revenue,`F2`

is the total variable costs, and`A2`

is the total fixed costs. - In the sixth row of the worksheet, create a formula to calculate the break-even point in units. The formula should be
`=A2/(B2-C2)`

, where`A2`

is the total fixed costs,`B2`

is the selling price per unit, and`C2`

is the variable cost per unit. - In the seventh row of the worksheet, create a formula to calculate the break-even point in dollars. The formula should be
`=A2/((B2-C2)/B2)`

, where`A2`

is the total fixed costs,`B2`

is the selling price per unit, and`C2`

is the variable cost per unit.

Once you have entered the formulas and values in the Excel worksheet, you can use it to conduct a break-even analysis for your company.

The worksheet will automatically update the values and formulas based on changes in the input data, so you can use it to explore different scenarios and see how they affect your break-even point.

## The Break Even point for social security

The break-even point for Social Security is the point at which the program’s revenues are equal to its expenses, and the program is neither making a profit nor a loss.

The Social Security program is funded primarily through payroll taxes paid by workers and their employers, as well as interest earned on the program’s trust funds.

The break-even point for Social Security is a theoretical concept, and the program’s actual break-even point may vary depending on a number of factors, such as changes in the economy, changes in the program’s costs, and other external factors.

In recent years, the program’s costs have been exceeding its revenues, and the Social Security trust funds are projected to be depleted by 2035.

At that point, the program will only be able to pay out benefits at a reduced level, unless Congress takes action to address the program’s financial challenges.

## Definitions

**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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