Break-Even Calculator
Summary
| Break-Even Point (Units): | 0 |
Break Even Point Formula and Example
The Break Even Calculator uses the following formulas:
Q = F / (P − V) , or Break Even Point (Q) = Fixed Cost / (Unit Price − Variable Unit Cost)
Where:
Q is the break even quantity,
F is the total fixed costs,
P is the selling price per unit,
V is the variable cost per unit.
Total Variable Cost = Expected Unit Sales × Variable Unit Cost
Total Cost = Fixed Cost + Total Variable Cost
Total Revenue = Expected Unit Sales × Selling Price Per Unit
Profit = Total Revenue − Total Costs
Example: Suppose a company produces and sells a product with the following values:
- Fixed Costs = $40,000
- Variable Cost Per Unit = $5
- Selling Price Per Unit = $10
In this example, the break-even point would be calculated as follows:
Q = $40,000 / ($10 − $5) = $40,000 / $5
Q = 8,000 units, the break-even point in unit sales is 8,000
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