What is the Break-Even Point?

The Break-Even Point (BEP) is the exact moment when your total business revenues equal your total costs (fixed plus variable). At this point, you are making zero profit but also zero loss. Every unit sold after the BEP contributes directly to profit.

How is Break-Even Point calculated?

The formula for Break-Even in units is: Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). The denominator is also known as the Contribution Margin.

What is Contribution Margin?

Contribution margin is the selling price of a unit minus its variable cost. It represents the portion of sales revenue that 'contributes' to paying off your fixed costs, and eventually, generating profit.

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Break-Even Point Calculator | Business Profitability Engine

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Total Fixed Costs (Rent, Salaries, Insurance)

Variable Cost (Per Unit)

Selling Price (Per Unit)

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Desired Target Profit

Contribution Margin

Break-Even Revenue

Break-Even Point (Units to Sell)

0 Units

Unit Economics

Var Cost

Cont. Margin

Costs at Break-Even

Fixed

Var

Profitability Metric	Calculated Output
Unit Contribution Margin	$0
Break-Even Point (Units)	0
Break-Even Revenue (Zero Profit/Loss)	$0
Units Required for Target Profit	0

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About the Break-Even Engine

The Break-Even Point (BEP) is the critical threshold where your total revenue equals your total expenses. Before reaching this point, your business operates at a loss. After this point, every single sale generates pure profit based on your contribution margin.

Contribution Margin: This is the Selling Price minus the Variable Cost. It is the amount of money each unit “contributes” towards paying off your fixed costs (like rent and salaries). Once fixed costs are fully paid off (the BEP), this margin drops straight to your net profit line.

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About the Break-Even Engine