Break-Even Calculator (BEP)

The break-even point is the level of sales at which total revenue equals total costs — neither a profit nor a loss. Below the BEP the business makes a loss; above it, a profit. It is calculated as: BEP (units) = Fixed Costs / (Selling Price − Variable Cost per Unit).

BEP (revenue) = Fixed Costs / Contribution Margin %. Contribution margin % = (Selling Price − Variable Cost) / Selling Price × 100. For example: fixed costs €5,000, price €150, variable cost €90 → margin 40%, BEP = 5,000 / 0.40 = €12,500 monthly revenue.

Fixed costs do not change with the volume of production or sales — for example rent, salaried staff, insurance, and software subscriptions. Variable costs increase proportionally with sales — for example raw materials, packaging, sales commissions, and shipping costs.

Contribution margin (unit) = Selling Price − Variable Cost per Unit. It represents how much each unit sold contributes to covering fixed costs and generating profit. The higher the contribution margin, the fewer units need to be sold to reach break-even.

The calculator works with net figures — VAT is excluded. Income tax (corporate or personal) is not included in the standard operating BEP. For a full financial analysis, tax should be accounted for separately to determine the after-tax break-even point.

At the BEP, total contribution margin exactly covers fixed costs (zero profit). At 2× BEP, the contribution margin is twice the fixed costs — so after covering fixed costs once, the remaining contribution margin equals fixed costs. This is a useful rule of thumb: doubling your BEP volume adds profit equal to your fixed cost base.

A high BEP means you need a lot of sales before turning a profit. Possible actions: reduce fixed costs (cheaper premises, renegotiate contracts), raise the selling price (if the market allows), lower variable costs (negotiate with suppliers), or focus on higher-margin products or services.

Yes, but for a multi-product company you need a weighted BEP that accounts for each product's share of the sales mix and its individual contribution margin. This calculator handles a single product or a homogeneous product group. For a full multi-product analysis, a spreadsheet model is recommended.

Break-even analysis assumes a linear relationship between revenue and variable costs — constant price and constant variable cost per unit. In reality, prices may change at different volumes, variable costs may have scale effects, and fixed costs may increase step-wise. The calculator provides estimates only.

The break-even calculator is particularly useful for entrepreneurs planning a new product or service, for those preparing a business plan or grant application, for managers evaluating the viability of a project, and for economics or business students learning management accounting concepts.