Break-Even Calculator

Q: What is a break-even point?

The break-even point is the point at which total revenue equals total costs, meaning there is no profit and no loss.

Q: What is contribution per unit?

Contribution per unit is the amount left from each sale after subtracting variable cost from selling price. It contributes toward covering fixed costs and then profit.

Q: Why must selling price be greater than variable cost?

If selling price is equal to or lower than variable cost, each unit does not contribute enough to cover fixed costs, so a break-even point cannot be reached using this basic formula.

Use this break-even calculator to estimate how many units you need to sell before your business covers its costs. The result helps show the break-even units, break-even revenue and contribution per unit, which can be useful for pricing decisions, cost planning, product analysis and basic financial forecasting.

Break-even units Break-even revenue Contribution per unit Useful for planning

Enter Cost and Price Details

Fixed Cost (PKR) Selling Price per Unit (PKR) Variable Cost per Unit (PKR)

Contribution per unit = selling price per unit minus variable cost per unit.

Summary

Break-Even Units—

Break-Even Revenue—

Contribution per Unit—

Formula used: Break-Even Units = Fixed Cost ÷ (Selling Price − Variable Cost)

What Is a Break-Even Point?

The break-even point is the point at which total revenue equals total cost. At this stage, a business is not making a profit, but it is not making a loss either. It is one of the most useful basic figures for pricing, product planning and cost control.

Knowing your break-even point helps answer a simple question: How much do I need to sell before I start making profit? That is why break-even analysis is often used by business owners, startups, managers, students and analysts.

How This Break-Even Calculator Works

This calculator uses fixed cost, selling price per unit and variable cost per unit to estimate break-even units and break-even revenue.

Enter your total fixed cost.
Enter the selling price for one unit.
Enter the variable cost for one unit.
Click Calculate Break-Even Point to view the result.

The calculator also shows contribution per unit, which is the amount each sale contributes toward covering fixed costs.

Example of Break-Even Calculation

Suppose a business has fixed costs of PKR 50,000, a selling price of PKR 500 per unit, and a variable cost of PKR 300 per unit.

Contribution per unit = 500 − 300 = PKR 200
Break-Even Units = 50,000 ÷ 200 = 250 units
Break-Even Revenue = 250 × 500 = PKR 125,000

This means the business would need to sell 250 units and generate about PKR 125,000 in revenue to cover the stated costs.

Why Break-Even Analysis Is Useful

Helps compare pricing decisions before launching or changing a product
Shows how fixed costs affect the number of units that must be sold
Helps estimate revenue targets for cost recovery
Supports budgeting, planning and basic risk analysis
Useful for businesses, startups, students and classroom examples

Method, Assumptions and Limitations

This calculator uses a basic break-even model. It assumes that selling price and variable cost stay constant for each unit, and that all units are sold at the same price. In real business conditions, discounts, taxes, demand shifts, product mix, wastage, returns, step costs or changing costs can affect actual results.

That means this tool is best used for estimation, comparison and planning rather than for exact financial reporting. For detailed business decisions, it is still important to review real cost data and operating conditions.

Frequently Asked Questions

What is a break-even point?
It is the point where total revenue equals total costs, so there is no profit and no loss.

How is break-even calculated?
Break-even units are calculated by dividing fixed cost by the difference between selling price per unit and variable cost per unit.

What is contribution per unit?
It is the amount left from each sale after variable cost is subtracted from selling price. It contributes toward fixed costs and then profit.

Why must selling price be greater than variable cost?
Because if each unit does not contribute more than its variable cost, the business cannot cover fixed costs using this basic model.

Does this tool store my data?
No. The calculation runs in your browser and does not require signup.

Disclaimer: This calculator is provided for informational and planning purposes only. Results are estimates and should be reviewed alongside real business costs, pricing and operating conditions.