finance Verified Precision Tool
Break Even Calculator
Calculate break even unit volume and revenue to cover fixed and variable costs.
Selected: US Dollar ($)Financial Calculation Solution
7 Units
Break Even Revenue: $140.00
Mathematical Formula
Break Even Units = Fixed Costs / (Price - Variable Cost)
Overview & Explanation
The break even point determines the minimum sales unit volume required for total revenue to equal total costs.
How It Works
- Subtract variable cost per unit from price to get unit contribution margin.
- Divide total fixed costs by contribution margin.
Practical Applications
- New product pricing models.
- Business plan financial projections.
Worked Example: $10,000 fixed costs, $50 price, $30 variable cost
Find break even units.
1
Contribution Margin
50 - 30
= $20 per unit
2
Break Even Units
10000 / 20
= 500 units
Frequently Asked Questions
What does breaking even mean?
Breaking even means generating enough revenue to cover all fixed and variable costs with zero net loss or profit.
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