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Every business needs to know its break-even point — the exact number of units at which it stops losing money.
The Formula
BEP = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
Standard formula used by professionals worldwide
Worked Example
Step-by-step
Fixed costs 200,000 | Price 500 | Variable 200 → BEP = 667 units
Key Concepts
- Accuracy: Results are as accurate as the inputs you provide
- Units: Always use consistent units throughout your calculation
- Verification: Double-check important calculations before making decisions
- Professional advice: For major financial, health, or structural decisions, consult a qualified professional
Privacy and Security
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- No data is sent to any server
- No sign-up or personal information required
- Your data stays private — always
Frequently Asked Questions
What is contribution margin?
Selling price minus variable cost. How much each sale contributes toward fixed costs.
How to lower BEP?
Reduce fixed costs, raise price, or lower variable cost per unit.
Can a profitable business have high BEP?
Yes — high fixed costs require more sales before profitability even with good margins.