Determine how many units you need to sell to cover fixed and variable costs.
Break-Even Units400
Break-Even Revenue$20,000
What is the Break-Even Point?
The break-even point is the production level where total revenues equal total expenses. At this point, a business is neither making a profit nor taking a loss.
Fixed vs Variable Costs
Fixed Costs: Expenses that do not change regardless of production volume (e.g., rent, salaries). Variable Costs: Expenses that scale with production (e.g., raw materials, packaging).
The difference between the selling price and the variable cost is your Contribution Margin.
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