Target Profit Calculator

Calculate required sales volume to reach a specific profit goal.

Target Profit Planning

Presets:

Cost & Target Parameters

Instant calculationTarget profit planning

Required Volume

Units Needed

750units

Selling 750 units generates $37,500.00 revenue to deliver $5,000.00 profit.

Required sales revenue$37,500.00

Contribution margin per unit$20.00

Total cost burden (fixed + target)$15,000.00

Formulas & Logic

Transparent mathematical formulas behind this calculation engine.

Required Units

Required Units = (Fixed Costs + Target Profit) ÷ (Selling Price - Variable Cost per Unit)

Calculates the volume of units needed to satisfy all fixed obligations plus target operating income.

Required Sales Revenue ($)

Required Revenue = Required Units × Unit Selling Price

Total top-line turnover needed to hit your bottom-line profit goal.

Worked Example

Consulting Studio Profit Goal ($10k Fixed / $5k Target / $50 Price / $30 Var)

A consulting studio has $10,000.00 in fixed monthly overhead, sells billable units at $50.00 with $30.00 in direct variable cost, and targets $5,000.00 in net operating income.

Given

Fixed Costs: $10,000.00
Target Profit: $5,000.00
Selling Price: $50.00
Variable Cost: $30.00

Calculated

Required Units: 750 units
Required Revenue: $37,500.00
Operating Profit: $5,000.00

Calculation

Contribution Margin = $50.00 - $30.00 = $20.00
Total Required = $10,000.00 + $5,000.00 = $15,000.00
Required Units = $15,000.00 ÷ $20.00 = 750 units
Required Revenue = 750 units × $50.00 = $37,500.00

Takeaway: Delivering 750 units produces $37,500.00 in revenue, fully covering $10,000.00 in fixed costs and delivering the $5,000.00 profit goal.

Methodology & Assumptions

Underlying definitions and operational accounting principles.

Operating Income Basis: Target profit is measured pre-tax (operating income before corporate income taxes).
Capacity Feasibility: Assumes the business has operational capacity to deliver the required units without expanding fixed plant or team overhead.

Frequently Asked Questions

Practical answers regarding margins, markups, and pricing strategy.

How do I calculate target profit?

To calculate sales needed for a target profit, add fixed costs to target profit and divide by unit contribution margin: Required Units = (Fixed Costs + Target Profit) ÷ (Selling Price - Variable Cost). Multiply required units by unit price to find required sales revenue.

How does target profit relate to break-even?

Target profit analysis treats your desired profit as an additional required fixed obligation. Break-even solves for $0 profit, while target profit solves for your specific dollar goal.