Break-even Calculator
Calculate break-even units and revenue from fixed costs, price and variable cost.
In short
A break-even calculator tells you how many units you must sell, and how much revenue that represents, to cover your fixed costs. VyaparKit's free break-even calculator takes monthly fixed costs, selling price per unit and variable cost per unit, then shows the contribution per unit, the contribution margin, the break-even units and the break-even revenue.
Rent, salaries, subscriptions
Material, packaging, commission
Break-even units
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What is break-even?
The number of units you must sell so that total revenue equals total cost. Above it, every extra unit is profit.
Formula
Break-even units = Fixed costs ÷ (Price − Variable cost per unit).
About the break-even calculator tool
Break-even is the sales level at which a business neither makes nor loses money. Every rupee of sales above it adds profit at the contribution rate; every rupee below it eats into savings. For a new cloud kitchen, a manufacturing unit deciding on a machine, or a shop weighing a higher-rent location, break-even units per month is the single most useful number to know before committing.
Owners often estimate it by dividing rent by the selling price, forgetting that each unit also carries material, packaging, delivery and commission costs. The result is a target that looks achievable but still loses money. Others build the calculation in Excel and never update it when a supplier raises prices. The break-even calculator separates fixed costs from variable cost per unit, computes the contribution, and updates the unit and revenue targets the moment any input changes.
Use the margin and markup calculators alongside this one when setting prices, and VyaparKit's payroll and purchase bill tools to keep track of the actual fixed and variable costs you are entering.
How to find your break-even point
- 1
Enter monthly fixed costs
In 'Fixed costs (per month)' add up rent, salaries, subscriptions, loan EMIs and other costs you pay regardless of sales, for example 60,000.
- 2
Enter the selling price per unit
In 'Selling price per unit' type the average price before GST at which you sell one unit, plate, order or service hour.
- 3
Enter the variable cost per unit
In 'Variable cost per unit' type what each unit costs to make and deliver: material, packaging, delivery, marketplace commission, payment gateway charges.
- 4
Read the break-even units
The large figure shows the units to sell each month to cover fixed costs, with the revenue that represents shown under it.
- 5
Check contribution
The breakdown lists contribution per unit and the contribution margin percentage. If the selling price is below the variable cost, the calculator tells you there is no break-even.
- 6
Test scenarios
Raise the price by ₹20 or cut the variable cost by ₹10 and watch the unit target fall; this shows which lever matters more for your business.
The formula, with a worked example
- Contribution per unit = Selling price − Variable cost. For a ₹250 product with ₹130 variable cost: ₹120.
- Contribution margin % = Contribution ÷ Selling price × 100. ₹120 ÷ ₹250 = 48%.
- Break-even units = Fixed costs ÷ Contribution per unit. With fixed costs of ₹60,000 a month: 60,000 ÷ 120 = 500 units a month.
- Break-even revenue = Break-even units × Selling price = 500 × ₹250 = ₹1,25,000. Equivalently, Fixed costs ÷ Contribution margin = 60,000 ÷ 0.48 = ₹1,25,000.
- Profit at any volume = (Units × Contribution) − Fixed costs. Selling 700 units gives 700 × 120 − 60,000 = ₹24,000 profit.
- Units for a target profit = (Fixed costs + Target profit) ÷ Contribution. For ₹30,000 profit: (60,000 + 30,000) ÷ 120 = 750 units.
- Fixed costs are those that do not change with volume in the short run: rent, salaries, insurance, software, loan EMIs. Variable costs move with each unit: raw material, packaging, delivery, commission, payment charges.
- Use prices and costs before GST. If an input is genuinely mixed, such as electricity, split it into a fixed base and a per-unit portion.
Who uses the break-even calculator
Cloud kitchens and cafes
A cloud kitchen in Gurgaon with ₹1.2 lakh of monthly rent and salaries checks how many ₹300 orders it needs after Zomato commission and packaging.
Small manufacturers
A Rajkot workshop deciding whether to lease a ₹40,000-a-month CNC machine finds how many extra parts it must sell to justify it.
Freelancers and studios
A photography studio in Kolkata converts its fixed costs into the number of shoots per month it needs at its average package price.
D2C brands
A tea brand shipping across India includes Shiprocket charges and the 2% payment gateway fee in variable cost to find its real monthly order target.
Break-even Calculator: frequently asked questions
- What is the break-even point formula?
- Break-even units = Fixed costs ÷ (Selling price per unit − Variable cost per unit). With ₹60,000 monthly fixed costs, a ₹250 price and ₹130 variable cost, the contribution is ₹120 and break-even is 500 units, or ₹1,25,000 in revenue. Above that, each unit adds ₹120 of profit.
- What counts as a fixed cost and what is variable?
- Fixed costs stay the same whether you sell 10 units or 1,000: rent, salaries, insurance, software subscriptions, loan EMIs. Variable costs rise with each unit: raw material, packaging, courier, marketplace commission, payment gateway fees. Electricity for a factory is often partly both; split it into a fixed base and a per-unit estimate.
- How do I calculate break-even in revenue instead of units?
- Divide fixed costs by the contribution margin ratio. If contribution is ₹120 on a ₹250 price, the ratio is 48%, and ₹60,000 ÷ 0.48 = ₹1,25,000 of monthly sales. This version is handy for shops selling many different products where a single unit price does not exist.
- What is contribution margin?
- Contribution is the amount each unit sold contributes towards fixed costs and then profit, calculated as selling price minus variable cost. The contribution margin expresses it as a percentage of the selling price. A ₹250 product with ₹130 variable cost has ₹120 contribution and a 48% contribution margin.
- How do I reduce my break-even point?
- Three levers: raise the selling price, lower the variable cost per unit, or cut fixed costs. Raising the price from ₹250 to ₹270 with the same ₹130 variable cost lifts contribution to ₹140 and drops break-even from 500 to 429 units on ₹60,000 of fixed costs. Cutting variable cost by ₹10 has a similar effect.
- Should GST be included in break-even calculations?
- No. Use prices and costs before GST, because the GST you collect is paid to the government and the GST you pay on inputs is usually recovered as credit. Include any GST you cannot claim, for example under the composition scheme, in the variable or fixed cost it relates to.
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Profit and loss statement explained with a worked example for a small business
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Break-even analysis for a small business: formulas and a worked example
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