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Break-even and margin of safety calculator

Work out break-even units and sales, and how far expected volume sits above break-even.

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Formulas used

Break-even units = fixed costs / (price - variable cost)

Break-even sales = break-even units x price

Margin of safety = (expected units - break-even units) / expected units

Worked example, made-up numbers

Fixed costs 5,00,000, price 100, variable cost 60. Break-even = 12,500 units, or sales of 12,50,000. At 20,000 units, margin of safety is 37.5%.

Assumptions

  • One product at one price. Costs split cleanly into fixed and variable.
  • If price does not exceed variable cost, there is no break-even.