To calculate break-even sales, divide fixed costs by the difference between selling price per unit and variable cost per unit.
Formula:
BES = FC / (SPU – VC)
Variables
| Variable | Meaning |
|---|---|
| BES | Break-Even Sales (Units) |
| FC | Fixed Costs |
| SPU | Selling Price per Unit |
| VC | Variable Cost per Unit |
What is a Break-Even Sales Calculator?
A Break-Even Sales Calculator helps businesses find the minimum sales needed to cover costs and avoid losses. It’s necessary for pricing strategies, financial planning, and assessing business profits.
For example, if a business has $10,000 in fixed costs, sells a product for $50 per unit, and has a $30 variable cost per unit, it must sell 500 units to break even.
This tool simplifies financial decision-making, making it easier to analyze pricing, cost control, and sales targets.
