Break-Even Point Without Tax
Classic, pre-tax break-even for quick planning and pricing decisions
When & Why Use Pre-Tax Break-Even?
Quick Estimates
Ignore tax for back-of-napkin pricing or early-stage planning.
Internal Benchmarks
Compare products or periods without tax-rate differences.
Simple KPIs
“We break even at 400 units” is easy for teams to remember.
Educational Clarity
Focus on cost-volume-profit logic before layering in tax complexity.
Pre-Tax Break-Even Formulas
Units
Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
Sales Dollars
Break-Even Sales $ = Fixed Costs ÷ Contribution Margin %
Contribution Margin %
CM % = (Selling Price − Variable Cost) ÷ Selling Price × 100
Calculate Pre-Tax Break-Even in 3 Simple Steps
- List Fixed Costs – rent, salaries, depreciation, insurance, etc.
- Compute Contribution per Unit – selling price minus variable cost.
- Divide – fixed costs ÷ contribution to get units or dollars.
No-Tax Break-Even Examples
Cupcake Bakery
Fixed Costs: $6,000/month
Selling Price: $3.50 per cupcake
Variable Cost: $1.25 per cupcake
Contribution = 3.50 − 1.25 = $2.25
Break-Even Units = 6,000 ÷ 2.25 ≈ 2,667 cupcakes/month
Break-Even Units = 6,000 ÷ 2.25 ≈ 2,667 cupcakes/month
Fitness Class
Fixed Costs: $4,000/month
Price per Class: $20
Variable Cost: $5 per attendee
Contribution = 20 − 5 = $15
Break-Even Attendees = 4,000 ÷ 15 ≈ 267 students/month
Break-Even Attendees = 4,000 ÷ 15 ≈ 267 students/month
Manufacturing Widget
Fixed Costs: $50,000
Gross Margin %: 40 %
Break-Even Sales $ = 50,000 ÷ 0.40 = $125,000
Pre-Tax Break-Even Calculator
Break-Even Units: —
Break-Even Sales ($): $—
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Pre-Tax Break-Even Sheet
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