What it calculates
The break-even point is the sales level at which revenue exactly covers fixed and variable costs — no profit, no loss.
How it works
Each unit contributes (price − variable cost) towards fixed costs. Dividing fixed costs by this contribution gives the units needed.
Formula
Break-even units = Fixed costs ÷ (Price − Variable cost)
- Contribution margin = (Price − Variable cost) ÷ Price
How to use it
- Enter monthly fixed costs.
- Enter price and variable cost per unit, both excluding GST.
- Read the units and revenue needed each month.
With ₹2 lakh fixed costs, ₹1,000 price and ₹600 variable cost:
Why it helps
- Shows how pricing changes affect the volume you need.
Limitations
- Assumes one product or an average unit, and constant costs and prices.
Frequently asked questions
Should I include GST in the price?
No. GST collected is paid to the government, so use prices and costs excluding GST.
What if I sell several products?
Use your average selling price and average variable cost per unit across the mix, or run the calculator for each product with its share of fixed costs.
Sources
Planning estimate only; not financial advice.