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Units = fixed costs ÷ (price − variable cost)

Break-even calculator

Enter fixed costs, a selling price and a variable cost per unit to see the units and revenue needed before the business makes a rupee of profit.

Short answer: break-even units are fixed costs ÷ (price − variable cost). ₹50,000 of fixed costs with a ₹100 price and ₹60 variable cost breaks even at 1,250 units, or ₹1,25,000 of revenue.

What the number is telling you

Each sale contributes ₹40 toward the ₹50,000 that has to be paid whether you sell anything or not. That is why volume is the only lever: raising the price by ₹10 lowers break-even to 1,000 units, and cutting variable cost by ₹10 does the same thing.

Worked example

Fixed costs ₹1,20,000, price ₹250, variable cost ₹150. Contribution is ₹100, so break-even is 1,200 units and ₹3,00,000 of revenue. Sell 1,500 units and profit is 300 × ₹100 = ₹30,000; the margin of safety is 300 units.

Assumptions. Costs are treated as either fixed or strictly variable, and the price is assumed constant at every volume. Real businesses have stepped fixed costs and volume discounts, so treat this as the starting calculation, not the full model.

Break-even questions

What is the break-even formula?

Break-even units = fixed costs ÷ (selling price per unit − variable cost per unit). The bracket is the contribution per unit — what each sale leaves behind to pay fixed costs. Break-even revenue is that unit count multiplied by the selling price.

What does contribution margin mean?

Contribution per unit is price minus variable cost; the contribution margin percentage divides it by the price. A ₹100 product with ₹60 variable cost contributes ₹40, or 40%, toward fixed costs and then profit.

Why does the calculator refuse when variable cost exceeds price?

Because no volume can break even when every unit loses money: the "contribution" is negative, so selling more increases the loss. The honest answer is that the product cannot cover fixed costs at this price, and the page says so instead of printing a negative unit count.

Is break-even the same as margin of safety?

No. Break-even is the volume where profit is zero. Margin of safety is how far actual or expected sales sit above that point — the cushion before losses begin. This page reports the break-even point; subtract it from your expected sales to get the cushion.

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