Break-Even Point Calculator
Every unit you sell contributes the difference between its price and its variable cost toward your fixed costs. Break-even is the point where those contributions have covered them entirely. Enter your costs and price to find it.
Rent, salaries, insurance — costs that do not move with volume.
Optional. Used for profit and margin of safety.
Optional. Shows the volume needed to reach it.
Break-even volume
1,000units
LKR 800,000 of revenue to cover every fixed cost
LKR 500
62.5% of the price
1,500
to clear LKR 250,000
At 1,500 units
- Revenue
- LKR 1,200,000
- Total contribution
- LKR 750,000
- Less fixed costs
- - LKR 500,000
- Profit
- LKR 250,000
Sales could fall 33.3% before you start losing money — that is 500 units of headroom.
This is a gross-margin model. It assumes one product at one price, and that every cost is cleanly either fixed or variable. Where a cost is partly both — a delivery van with fixed lease and variable fuel — split it before entering, or the break-even point will be optimistic.
The whole model in one line
Every unit sold contributes the difference between its price and its variable cost toward the fixed costs. Break-even is the volume at which those contributions have covered the fixed costs exactly, and every unit after it is profit.
With Rs. 500,000 of fixed costs, a Rs. 800 price, and Rs. 300 of variable cost, each unit contributes Rs. 500 and break-even is 1,000 units, or Rs. 800,000 of revenue.
| Price | Variable cost | Contribution | Break-even on Rs. 500,000 |
|---|---|---|---|
| Rs. 800 | Rs. 300 | Rs. 500 | 1,000 units |
| Rs. 800 | Rs. 500 | Rs. 300 | 1,667 units |
| Rs. 700 | Rs. 300 | Rs. 400 | 1,250 units |
| Rs. 1,000 | Rs. 300 | Rs. 700 | 715 units |
Splitting fixed from variable is the hard part
The arithmetic is trivial; classifying the costs is not. A cost is variable only if it changes when you sell one more unit. Everything else is fixed, however unpredictable it feels month to month.
Costs that are genuinely both need splitting before they are entered. A delivery van with a fixed lease and variable fuel is two costs, not one, and treating the whole thing as fixed will understate the break-even volume.
- Variable: materials, packaging, payment fees, sales commission, freight out.
- Fixed: rent, salaries, insurance, software subscriptions, accounting.
- Split: utilities, delivery, anything with a standing charge plus usage.
- Include payment gateway fees - two to three percent of every sale is variable cost.
Margin of safety
Break-even tells you the floor; margin of safety tells you how far above it you are. Selling 1,500 units against a break-even of 1,000 means sales could fall by a third before the business starts losing money.
A thin margin of safety is the number to watch. It means a single slow month, a lost customer, or a supplier price rise pushes the period into a loss, and it is a better early-warning signal than profit alone.
Fixed and variable is a judgement, not a label
The split that drives the whole model is rarely as clean as the categories suggest. Rent and salaried staff are fixed until the business grows enough to need more space or more people, at which point they step up rather than rising smoothly. Utilities are partly fixed and partly driven by output.
Costs that step are the ones that catch people out. A break-even calculated on current fixed costs stops being valid the moment volume crosses the point where you need a second shift, a larger unit, or another delivery vehicle - and the new break-even can sit well above the volume that triggered the step.
Where a cost genuinely splits, put the standing portion into fixed costs and the per-unit portion into variable. Where a cost steps, calculate break-even on both sides of the step so you know what the next stage of growth actually has to deliver before it pays for itself.