Break-Even Point Calculator

Formula

The formula to calculate the Break-Even Point is:

\[ \text{BP} = \frac{\text{TFC}}{\text{RPU} - \text{CPU}} \]

Where:

\( \text{BP} \) is the break-even point in units sold
\( \text{TFC} \) is the total fixed costs
\( \text{RPU} \) is the revenue per unit sold
\( \text{CPU} \) is the cost per unit produced

What is a Break-Even Point?

A break-even point is defined as the exact quantity or monetary value at which a certain business or product becomes profitable. That is, the revenue outweighs the costs.

Example Calculation

Let's assume the following values:

Total Fixed Costs (TFC) = 1000
Revenue Per Unit (RPU) = 50
Cost Per Unit (CPU) = 30

Using the formula:

\[ \text{BP} = \frac{1000}{50 - 30} = 50 \, \text{units} \]

The Break-Even Point (BP) is 50 units.