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Break-Even Analysis & Margin of Safety Calculator
Determines the exact break-even quantity and sales revenue required to cover fixed overhead and variable costs.
Cost-Volume-Profit (CVP) Break-Even Calculator
Computes break-even sales volume, contribution margin, and target profit thresholds
Industry Presets:
Break-Even Units Required
667 units
Break-Even Revenue Threshold: $33,350
Contribution Margin$30/unit (60%)
Units to Target Profit834 units
Target Sales Revenue$41,700
CVP Break-Even Graph:
Loss ZoneBE PointProfit Zone
Contribution Margin = $50 - $20 = $30/unit (60%). Break-Even Q = $20,000 / $30 = 667 units ($33350 revenue). Target (+$5,000) = 834 units.
What is Break-Even Analysis?
Break-even analysis is an accounting and financial tool used to determine the sales volume at which total revenues exactly equal total costs, resulting in zero profit and zero loss.
Formula & Step-by-Step Calculation
Q_BE = Fixed Costs / (Price - Variable Cost per Unit), Revenue_BE = Q_BE · Price
Contribution margin break-even formula.
Worked Step-by-Step Examples
Example 1
Fixed costs $20,000, selling price $50, variable cost $20/unit
Solution: Break-even: 667 units ($33,350 revenue)
• Unit CM = 50 - 20 = $30; Q = 20,000 / 30 = 666.67 ⟹ 667 units
Common Real-World & Academic Use Cases
- ✓ New business launch feasibility studies
- ✓ Setting product pricing strategies
- ✓ Assessing impact of overhead cost increases
How to Use the Break-Even Analysis & Margin of Safety Calculator
1
Enter Fixed Overhead
Input rent, salaries, and recurring costs.
2
Enter Unit Price & Cost
Input selling price and direct unit production cost.
3
Review Break-Even Quantity
Inspect required sales units and revenue threshold.
Frequently Asked Questions
Q: What is the Contribution Margin?
The contribution margin is the selling price minus the variable cost per unit; it represents the amount each unit contributes toward covering fixed costs.