Break-Even Point Calculator
Determines the exact number of units or revenue required to cover all fixed and variable costs. Also calculates the margin of safety, showing how far current sales can drop before the business starts losing money.
Accounting - Break Even Point Calculator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Knowing how many units you must sell to avoid a loss
- Setting minimum revenue targets for new products or services
- Quantifying the margin of safety for current sales volumes
- Evaluating whether a price change makes the business more or less resilient
- Justifying fixed cost investments by showing the required sales uplift
Who This Is For
- Product managers evaluating launch viability
- Small business owners setting sales targets
- Financial analysts modeling cost-volume-profit relationships
- Entrepreneurs validating business model assumptions
Inputs
- $Total fixed costs
- $Variable cost per unit
- $Selling price per unit
- #Current sales volume
- $Target profit (optional)
Outputs
- Break-even point in units
- Break-even point in revenue dollars
- Contribution margin per unit
- Margin of safety in units and percentage
- Units required to reach target profit
How Calculations Work
The contribution margin per unit is the selling price minus the variable cost. Dividing total fixed costs by the contribution margin gives the break-even quantity. Multiplying that quantity by the selling price gives break-even revenue. The margin of safety is the difference between current sales and break-even sales, expressed as a percentage of current sales.
Example Use Case
Scenario: A bakery has $8,000/month in fixed costs, sells cakes at $25 each with a variable cost of $10 per cake, and currently sells 700 cakes per month.
Result: Contribution margin is $15 per cake. Break-even is 534 cakes ($13,350 in revenue). Margin of safety is 166 cakes (23.7%), meaning sales could drop nearly 24% before the bakery loses money.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
What if I sell multiple products at different prices?
Use the weighted-average mode in CONFIG. Enter each product's price, variable cost, and sales mix percentage. The template computes a blended contribution margin.
Does this account for step-fixed costs?
No. If your fixed costs increase at certain volume thresholds (e.g., hiring a second shift), you need to run the analysis separately for each cost step.
How accurate is the margin of safety number?
It is as accurate as your current sales volume input. If your sales fluctuate, use an average over several months for a more representative figure.
Can I use this for service businesses without units?
Yes. Define a 'unit' as one billable hour, one project, or one client engagement. Enter the average revenue and variable cost per unit accordingly.
What happens if variable cost exceeds the selling price?
The contribution margin is negative, meaning every unit sold increases the loss. The template will flag this and break-even becomes mathematically impossible at that price.
Download Break-Even Point Calculator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.