# Break-Even Point Formula: Units and Revenue (Excel Example)

- URL: https://betteranalyst.com/metrics/break-even-point
- Published: 2026-10-30
- Updated: 2026-10-30
- Author: David Bressler, Founder (https://betteranalyst.com/authors/david-bressler)

> **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.

Category: [Operations](https://betteranalyst.com/metrics#operations)

Break-even point formula in units and revenue, a meal-prep kitchen example, the Excel formula, and how to add a profit target or a price change.

## 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.

*Monthly cost inputs (table starts in cell A1)*

| Input | Value |
| --- | --- |
| Monthly fixed costs | $38,400 |
| Price per meal | $12.50 |
| Variable cost per meal | $7.70 |
| Target monthly profit | $6,000 |

1. Contribution margin per meal = 12.50 − 7.70 = $4.80.
2. Break-even meals = 38,400 ÷ 4.80 = 8,000 meals a month.
3. Break-even revenue = 8,000 × 12.50 = $100,000 of monthly sales.
4. Meals for the profit target = (38,400 + 6,000) ÷ 4.80 = 9,250. In Excel: =(B2+B5)/(B3-B4).
5. 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](https://betteranalyst.com/data-connectors/google-sheets), [Airtable](https://betteranalyst.com/data-connectors/airtable), [PostgreSQL](https://betteranalyst.com/data-connectors/postgresql), [MySQL](https://betteranalyst.com/data-connectors/mysql), [OneDrive](https://betteranalyst.com/data-connectors/onedrive).

[Try Better Analyst free](https://betteranalyst.com/signup)

## Further reading

- [Gross margin formula](https://betteranalyst.com/metrics/gross-margin)
- [Net profit margin formula](https://betteranalyst.com/metrics/net-profit-margin)
- [ROUNDUP function](https://betteranalyst.com/excel/roundup-function)
- [Business budget template](https://betteranalyst.com/excel-templates/business-budget-template)
- [Better Analyst for operations teams](https://betteranalyst.com/solutions/operations)

## Frequently asked questions

### How do I calculate break-even revenue directly?

Divide fixed costs by the contribution margin ratio: Fixed costs ÷ ((Price − Variable cost) ÷ Price). Here 38,400 ÷ (4.80 ÷ 12.50) = 38,400 ÷ 0.384 = $100,000.

### What is the break-even formula in Excel?

With fixed costs in B2, price in B3 and variable cost in B4, use =B2/(B3-B4) for units. Wrap it in ROUNDUP, =ROUNDUP(B2/(B3-B4),0), to get whole units.

### How do I include a profit target in break-even?

Add the target profit to fixed costs: (Fixed costs + Target profit) ÷ Contribution margin. A $6,000 target needs (38,400 + 6,000) ÷ 4.80 = 9,250 meals.

## Related metrics

- [Gross Margin Formula: How to Calculate Gross Margin in Excel](https://betteranalyst.com/metrics/gross-margin)
- [Net Profit Margin Formula: Calculate It in Excel (Example)](https://betteranalyst.com/metrics/net-profit-margin)