Break-Even Point Calculator
Break-even point = Fixed Costs / (Price per unit - Variable cost per unit). If fixed costs are Rs 5 lakh/month, price per unit Rs 500, and variable cost Rs 300: break-even = Rs 5,00,000 / (500-300) = 2,500 units/month. Selling fewer than 2,500 units means a loss; above 2,500 means profit.
Profit
₹400
Profit Margin
33.33%
Profit / Selling Price
Markup
50%
Profit / Cost Price
Margin % = (Profit / Selling Price) x 100. Markup % = (Profit / Cost Price) x 100. A 50% markup is only a 33.3% margin.
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Common questions about Break-Even Point Calculator
What is the difference between fixed costs and variable costs?
Fixed costs do not change with production volume: rent, salaries, loan EMIs, insurance. Variable costs change proportionally with output: raw materials, packaging, sales commissions, shipping. Semi-variable costs have both elements: electricity (base charge + per-unit). Accurate cost classification is critical for break-even analysis.
How can I lower my break-even point?
Three approaches: (1) Reduce fixed costs - renegotiate rent, reduce headcount, cut subscriptions. (2) Increase price per unit - even 5% price hike significantly lowers break-even. (3) Reduce variable cost per unit - improve procurement, reduce waste, renegotiate supplier contracts. Combinations of all three are most effective.
What is the margin of safety and how is it calculated?
Margin of safety = (Actual sales - Break-even sales) / Actual sales x 100. If your actual sales are Rs 15 lakh and break-even is Rs 10 lakh: margin of safety = Rs 5 lakh / Rs 15 lakh = 33.3%. This means sales can fall 33.3% before you start losing money. A margin of safety above 20-25% is generally considered healthy for a small business.