Break-even calculator with workings
Enter price, variable cost per unit and fixed costs. Optionally add planned sales (for the margin of safety) and a target profit. Every result comes with its workings.
Result
- Break-even quantity
- 750 units
- Break-even revenue
- £37,500.00
- Unit contribution
- £20.00
- Result at planned sales
- £5,000.00
- Margin of safety
- 250 units (25%)
Workings
- 1Unit contribution = £50.00 − £30.00 = £20.00
- 2Break-even quantity = fixed costs / unit contribution = £15,000.00 / £20.00 = 750 units
- 3Break-even revenue = 750 × £50.00 = £37,500.00
- 4Result = £20.00 × 1,000 − £15,000.00 = £5,000.00
- 5Margin of safety = 1,000 − 750 = 250 units; as % of planned sales: 250 / 1,000 × 100 = 25%
The formulas
Break-even quantity = fixed costs / (price − variable cost)
- At break-even the total contribution exactly covers fixed costs: profit = 0.
- Margin of safety = planned sales − break-even quantity.
- Quantity for a target profit = (fixed costs + profit) / unit contribution.
Frequently asked questions
Why divide by the unit contribution, not the price?+
Each unit first pays for its own variable cost; only the rest, the contribution, goes towards fixed costs.