# Break Even Calculator

## What is Break Even Calculator?

A break-even calculator is a tool that helps businesses determine the point at which their revenues equal their expenses. This point is called the "break-even point," and it is an important metric for businesses to understand because it helps them determine how many units they need to sell to cover their costs.

### Break Even Calculator

Total Fixed Costs: | $ |

Cost Per Unit: | $ |

Sales Price Per Unit: | $ |

Anticipated Unit Sales: |

### Break Even Calculator result:

Total Revenue | |

Total Costs | |

Net Profit | |

Break Even Unit |

How to Calculate Break Even Point?

The formula for calculating the break-even point is:

Break Even Point = Fixed Costs / (Unit Selling Price - Variable Costs)

## The Break Even Formula is used to calculate the number of units that must be sold to break even. The formula is as follows:

Break Even Point (BEP) = Fixed Costs / (Price – Variable Costs)

Where:

Fixed Costs = Total costs that do not change with the number of units produced.

Price = The price of the product or service.

Variable Costs = The cost of producing each unit of product or service.

Where:

Fixed Costs: these are the costs that do not vary with the level of production, such as rent, salaries, and insurance.

Unit Selling Price: this is the price at which each unit is sold.

Variable Costs: these are the costs that vary with the level of production, such as raw materials and labor.

### Example:

Let's say a company has fixed costs of $10,000 per month and variable costs of $5 per unit. They sell their product for $20 per unit.

To calculate the break-even point, we would use the formula:

Break Even Point = $10,000 / ($20 - $5) = 714.29 units

This means that the company needs to sell 714.29 units to cover its costs and break even.