Break-Even Calculator
How many units need to sell — and how much revenue that represents — before fixed costs are covered and every further sale turns into profit.
Break-even calculator
How many units — and how much revenue — before fixed costs are covered and every further sale is profit.
Educational illustration only. Assumes a single product, constant price and constant variable cost per unit — a real multi-product business needs a weighted-average contribution margin instead.
The formula
Break-even units = Fixed Costs ÷ (Selling Price per unit − Variable Cost per unit). The denominator — price minus variable cost — is called the contribution margin: how much of each unit’s selling price is left over, after covering that unit’s own variable cost, to go toward paying off fixed costs. Once enough units are sold to cover fixed costs entirely, every additional unit’s contribution margin is pure profit.
A worked example
A product sells for ₹400, costs ₹250 in variable cost per unit (materials, direct labour, packaging), and the business carries ₹5,00,000 in fixed costs per period (rent, salaries, fixed overhead). Contribution margin is ₹150 per unit. Break-even is 5,00,000 ÷ 150 ≈ 3,334 units, or 3,334 × ₹400 ≈ ₹13,33,600 in revenue. Below that volume, the business loses money; above it, every unit contributes ₹150 to profit.
Build the full model in Excel
This same contribution-margin logic underpins the budgeting and variance-analysis work in Advanced Excel for Finance & Business, where it’s built as a live, reusable spreadsheet model rather than a one-off calculation.