Break-Even Point Formula: Units and Revenue (Excel Example)
Summary
Break-even point (units) = Fixed costs ÷ (Price per unit − Variable cost per unit). Multiply by price for break-even revenue. A kitchen with $38,400 of monthly fixed costs, a $12.50 price and $7.70 variable cost per meal breaks even at 8,000 meals, or $100,000 of sales, a month.
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Break-even point formula
Break-even units = Fixed costs ÷ (Price − Variable cost per unit); Break-even revenue = Break-even units × Price- Fixed costs: Costs that don't change with volume over the period: rent, salaried staff, insurance, software, loan payments.
- Price per unit: Average net selling price after discounts.
- Variable cost per unit: Costs that rise with each unit sold: ingredients, packaging, payment fees, delivery.
- Contribution margin: Price minus variable cost per unit: the amount each sale contributes toward fixed costs.
How to calculate break-even point in Excel and Google Sheets
Excel, using the cells in the worked example below:
=B2/(B3-B4)Worked example
A meal-prep kitchen sells ready meals by subscription and wants to know how many meals a month it must sell to cover costs, and how many to hit a $6,000 monthly profit target.
| Input | Value |
|---|---|
| Monthly fixed costs | $38,400 |
| Price per meal | $12.50 |
| Variable cost per meal | $7.70 |
| Target monthly profit | $6,000 |
- Contribution margin per meal = 12.50 − 7.70 = $4.80.
- Break-even meals = 38,400 ÷ 4.80 = 8,000 meals a month.
- Break-even revenue = 8,000 × 12.50 = $100,000 of monthly sales.
- Meals for the profit target = (38,400 + 6,000) ÷ 4.80 = 9,250. In Excel: =(B2+B5)/(B3-B4).
- Price sensitivity: at $13.00, break-even falls to 38,400 ÷ 5.30 = 7,245.3, so 7,246 meals once rounded up.
Result: 8,000 meals per month ($100,000 break-even revenue)
How to interpret break-even point
Break-even turns a cost structure into a sales target you can track weekly. The gap between actual sales and break-even (the margin of safety) shows how much demand can fall before you lose money: selling 9,000 meals gives a margin of safety of 1,000 meals, about 11%. Because the formula assumes one average price and a constant variable cost, re-run it when your mix, discounts or input costs change, and calculate it per product line if contribution margins differ a lot.
Common mistakes
- Classifying semi-variable costs as fixed. Hourly kitchen staff who scale with volume belong partly in variable cost, or break-even looks lower than it is.
- Using list price instead of the average price actually realised after discounts and promotions.
- Forgetting to round up. You can't sell 7,245.3 meals; break-even is the next whole unit.
- Treating one blended break-even as valid for every mix. If a cheaper product grows, the blended contribution margin falls and break-even rises.
Calculate break-even point with Better Analyst
Connect your data or upload a spreadsheet, then ask in plain English. Better Analyst writes and runs the calculation and shows the steps, so you can check the number.
- “What is our monthly break-even in units and revenue using last quarter's fixed and variable costs?”
- “Show break-even meals at prices from $11 to $14 in $0.50 steps.”
- “How many weeks this year did we sell below break-even?”
Usually calculated from: Google Sheets, 
Airtable, PostgreSQL, MySQL, OneDrive.
Further reading
Frequently asked questions
How do I calculate break-even revenue directly?
What is the break-even formula in Excel?
How do I include a profit target in break-even?
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