Rent, salaries, utilities, insurance, etc.
Materials, packaging, shipping per unit
Break-Even Units
715
Break-Even Revenue
AED 107,250
See how price changes affect your break-even point.
| Change | Price | Units | Revenue |
|---|---|---|---|
| -20% | AED 120 | 1,250 | AED 150,000 |
| -10% | AED 135 | 910 | AED 122,850 |
| Current current | AED 150 | 715 | AED 107,250 |
| +10% | AED 165 | 589 | AED 97,185 |
| +20% | AED 180 | 500 | AED 90,000 |
Understanding break-even analysis
What is break-even?
Break-even is the point at which your total revenue exactly equals your total costs, meaning you are making neither a profit nor a loss. It is calculated by dividing your fixed costs by the contribution margin per unit (selling price minus variable cost per unit). Knowing your break-even point helps you set sales targets, price products correctly, and understand the minimum performance your business needs to achieve financial viability.
How can I lower my break-even point?
Lower your break-even point by: reducing fixed costs (negotiate lower rent, optimize staffing), reducing variable costs per unit (better supplier deals, efficient processes), or increasing your selling price (add value through branding, quality improvements). In the UAE, leveraging free zone benefits, optimizing Ejari costs, and using shared office spaces can help reduce fixed overheads. Even small improvements compound significantly over time.
What are fixed vs variable costs?
Fixed costs remain constant regardless of how many units you produce or sell. Examples include rent, salaries, insurance, and license fees. Variable costs change in proportion to your output, such as raw materials, packaging, shipping, and sales commissions. Understanding the distinction is crucial for accurate break-even analysis and helps you identify which costs to target for reduction.
Note: This calculator assumes a linear cost structure. Real-world costs may include step costs, economies of scale, and seasonal variations. Consult a business adviser for complex scenarios.
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Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms