Break-Even Analysis, or simply BEA, is a mathematical computation that helps a business identify the point from which it becomes profitable (break-even point). Simply put, it tells a business at what point it covered all the cost of doing business, and subsequently, starts making profits.
This break even calculator allows a business to accomplish the following:
- » Determine the quantity it needs to produce or sell in order to break-even;
- » Determine the selling price it needs to charge for a specific quantity you sell in order to break-even.
Break-Even Analysis is part of the Online price analysis, complements of our consulting team.
- Complementarily, in order to calculate the Break Even Point for your business, we offer a calculator free of charge.
You may link to this calculator from your website as long as you give proper credit to C. C. D. Consultants Inc. and there exists a visible link to our website.
To link to our Break-Even Analysis from your website or blog, just copy the following html code:
<a href="http://www.ccdconsultants.com/calculators/price-analysis/break-even-analysis">Break-Even Analysis</a>
- Although C. C. D. Consultants Inc.'s personnel has verified and validated the Break-Even calculator, C. C. D. Consultants Inc. is not responsible for any outcome derived from its use. The use of Break-Even calculator is the sole responsibility of the user and the outcome is not meant to be used for legal, tax, or investment advice.
Definitions and terms used in Break-Even Analysis
- Selling Price per Unit
- The price that a unit is expected to be sold for.
- Selling Units
- The number of units expected to be sold (determined by a contract or market research).
- Fixed Cost (FC)
- The cost that remains constant within a range of production or sales, regardless of the number of units produced or sold within that range. Typical fixed costs are: rent, mortgage, equipment, salaries, insurance, fixed utilities (office utilities) etc.
- Variable Cost per Unit
- The cost that vary with the production or the purchase of one unit.
- Total Variable Cost (VC)
- The cost that varies directly with the number of units produced or sold. Typical variable costs are: materials, packaging and shipping, sales commission, hourly wages, variable utilities (factory utilities) etc.
- Total Variable Cost = Selling Units x Variable Cost per Unit
- Total Cost (TC)
- Total expenses incurred in the process of producing or selling a number of units.
- Total Cost (TC) = Fixed Cost (FC) + Total Variable Cost (VC)
- Total Revenue
- The total sales value of the units produced or sold.
- Total Revenue = Selling Units x Selling Price per Unit
- The benefits from producing or selling a number of units.
- Profit = Total Revenue - Total Cost
- Break-even point
- The point where total revenue (total sales) equal total cost.