Break Even Calculator
Calculate how many units and how much revenue you need to break even. See contribution margin for any price and cost structure.
Break-even units
500
Units to sell to cover fixed costs
Break-even revenue
₹2,50,000
Contribution per unit
₹200
Price 500 − variable 300
Contribution margin
40%
Share of each sale that covers fixed costs
With ₹1,00,000 of monthly fixed costs and ₹200 contributed per sale (₹500 price minus ₹300 variable cost), the business breaks even at 500 units or ₹2,50,000 of revenue per month.
Last updated: August 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Break-even analysis tells a business exactly how many sales keep the lights on, which is the first number every Indian entrepreneur should know. A new chai-and-snacks stall, a boutique in a mall, an agency with monthly salaries, or a manufacturer with plant overhead all face the same question: what monthly volume covers the bills? The analysis also drives pricing — if break-even units look unreachable at the current price, either the price rises or variable costs must fall. Restaurants use it to set daily covers, e-commerce sellers use it to plan ad spend against unit contribution, and service providers count completed orders instead of units. Lenders and investors ask for the break-even point before funding small businesses, because it separates realistic ventures from those whose costs outrun their market.
How to Use This Calculator
- Step 1: Enter fixed costs for the period — rent, salaries, utilities that do not change with sales.
- Step 2: Enter the selling price per unit of your product or service.
- Step 3: Enter the variable cost per unit — materials, packaging, delivery and per-unit labour.
- Step 4: Read the units and revenue needed to cover all costs, plus the contribution per unit.
Worked Example
A Surat textile trader rents a showroom for ₹1,00,000 a month and sells kurta sets at ₹500 each, with fabric and tailoring costing ₹300 per set. Each sale contributes ₹200 towards fixed costs — a 40% contribution margin. The break-even point is 500 sets a month, or ₹2,50,000 of revenue. Anything beyond the 500th set is pure profit, while falling short of 500 sets means the month runs at a loss.
Tips and Common Mistakes
- •Tip 1: Re-check the split of costs whenever input prices change — fabric and fuel move variable costs fast in India.
- •Tip 2: Track the break-even units monthly alongside actual sales to spot trouble early.
- •Tip 3: Use the contribution margin to evaluate discounts — a 10% festive discount can cut contribution per unit sharply.
- ✗Mistake 1: Treating a one-time machinery purchase as a monthly fixed cost; capital expenses need amortising over their life.
- ✗Mistake 2: Ignoring the break-even when the variable cost is near the selling price — thin contributions mean huge sales targets.
Frequently Asked Questions
What does break-even mean for a business?
It is the sales level where total revenue exactly covers total costs — no profit, no loss. Every unit sold beyond the break-even point contributes directly to profit, which makes it a vital planning number for new ventures.
Which costs are fixed and which are variable?
Fixed costs stay constant regardless of sales — shop rent, salaries, insurance and licences. Variable costs change with output — raw materials, packaging, delivery and per-unit labour. Getting this split right is the hardest part of the analysis.
Can I find break-even for a service business?
Yes, treat a completed service as one unit. For example, a salon with ₹1,00,000 monthly fixed costs where each service contributes ₹200 towards them breaks even at 500 services a month.
What if my contribution margin is negative?
If the variable cost per unit is at or above the selling price, every sale loses money and no break-even point exists. The calculator returns no result — you must raise prices or cut variable costs first.
How often should I redo the break-even analysis?
Re-run it whenever costs or prices change — rent hikes, input price rises or festive discounts all move the number. Indian small businesses often recheck monthly because raw material prices fluctuate.
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