How to Use the Break-Even Analysis Calculator

The Break-Even Analysis Calculator is a powerful tool designed to help businesses determine the point at which total revenue equals total costs. This is the moment when your business starts making a profit. Follow these simple steps to use the calculator:

1: Enter Fixed Costs

• Input the total fixed costs that do not change regardless of production levels in the “Fixed Costs (₹)” field.
• Examples of fixed costs include:
  • Rent or lease payments
  • Salaries for permanent staff
  • Insurance premiums
  • Marketing expenses
• For example, if your monthly fixed costs are ₹50,000, enter 50000.

2: Enter Selling Price per Unit

• Input the price at which each unit of your product or service is sold in the “Selling Price per Unit (₹)” field.
• For example:
  • If you sell a product for ₹500 per unit, enter 500.
  • Ensure this value exceeds your variable cost per unit; otherwise, you won’t break even.

3: Enter Variable Cost per Unit

• Input the cost incurred for producing each unit in the “Variable Cost per Unit (₹)” field.
• Examples of variable costs include:
  • Raw materials
  • Direct labor costs
  • Packaging and shipping costs
• For example, if it costs ₹300 to produce one unit, enter 300.

4: Calculate Break-Even Point

• Click the “Calculate Break-Even Point” button to generate the results.
• The calculator will display two key metrics:
  • Break-Even Units: The number of units you need to sell to cover all your costs.
  • Break-Even Revenue: The total revenue required to reach the break-even point.

Understanding the Results

• Break-Even Units: This indicates how many units must be sold to cover fixed and variable costs. Until you reach this number of units sold, the business will incur losses.
• Break-Even Revenue: This is the total sales revenue you must generate to break even. It’s calculated by multiplying the break-even units by the selling price per unit.