Break Even Point Calculator Two Products Excel

What is Break Even Point?

The break-even point is the level of sales at which the revenue from two products equals their combined costs. It's a key metric for businesses to understand when they're selling two products and want to know at what point they're covering all costs.

For two products, the break-even point occurs when the total revenue from both products equals the total cost of producing both products. This helps businesses determine the minimum sales volume needed to cover all expenses.

Formula

The break-even point for two products can be calculated using the following formula:

Where:

• Total Fixed Costs = Fixed costs for both products
• Selling Price Product A = Price at which Product A is sold
• Variable Cost Product A = Variable cost per unit of Product A
• Selling Price Product B = Price at which Product B is sold
• Variable Cost Product B = Variable cost per unit of Product B

This formula helps determine the point at which the revenue from both products covers all costs.

How to Use the Calculator

1. Enter the total fixed costs for both products in the "Total Fixed Costs" field.
2. Enter the selling price for Product A in the "Selling Price Product A" field.
3. Enter the variable cost per unit for Product A in the "Variable Cost Product A" field.
4. Enter the selling price for Product B in the "Selling Price Product B" field.
5. Enter the variable cost per unit for Product B in the "Variable Cost Product B" field.
6. Click the "Calculate" button to see the break-even point.
7. Review the result and use the information to make business decisions.

Worked Example

Let's say you have two products:

• Product A: Selling price $10, Variable cost $6
• Product B: Selling price $15, Variable cost $9
• Total fixed costs: $5,000

Using the formula:

This negative result indicates that with the given numbers, it's impossible to reach a break-even point where both products cover all costs. This suggests that either the prices or costs need to be adjusted to achieve a positive break-even point.

Excel Formula

You can calculate the break-even point in Excel using the following formula:

Replace the variables with your actual data. For example, if your data is in cells A1 to E1:

This will give you the break-even point in Excel.