Target Profit Calculator
Calculate Target Profit step by step: Target units = (fixed costs + target profit) ÷ (price − variable cost per unit), rounded up to a whole unit.
In short
Formula: Target units = (fixed costs + target profit) ÷ (price − variable cost per unit), rounded up to a whole unit.
What this calculator does
Calculate Target Profit step by step: Target units = (fixed costs + target profit) ÷ (price − variable cost per unit), rounded up to a whole unit. Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Fixed costs, Target operating profit (before tax), Selling price per unit, and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this accounting & costing calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Fixed costs
- — number value.
- Target operating profit (before tax)
- — number value.
- Selling price per unit
- — number value.
- Variable cost per unit
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
Target-profit CVP formula (OpenStax Principles of Managerial Accounting).
The target is pre-tax. For an after-tax goal, divide it by (1 − tax rate) first.
Rounding up guarantees the target is reached.
Target units = (fixed costs + target profit) ÷ (price − variable cost per unit), rounded up to a whole unit.
Inputs used: Currency (symbol only, never converted), Fixed costs, Target operating profit (before tax), Selling price per unit, Variable cost per unit.
Worked example
A $20,000 profit goal
- Contribution per unit = $50.
- (50,000 + 20,000) ÷ 50 = 1,400 units.
- Revenue = 1,400 × 80 = $112,000.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Single product or constant mix.
- Linear costs and revenue.
- Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
- The result depends on the values you enter for this target profit calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
What about after-tax profit?
Divide your after-tax target by (1 − your tax rate) and enter that. We do not assume a tax rate.
Why is the answer rounded up?
You cannot sell part of a unit, and rounding down would fall short of the target. Check the formula, example, and limitations on this page before using the result for a real accounting & costing decision.
Can I set the target to zero?
Yes — the result is then the break-even volume. Check the formula, example, and limitations on this page before using the result for a real accounting & costing decision.
How do I use the Target Profit Calculator?
Enter the required values for Currency (symbol only, never converted), Fixed costs, Target operating profit (before tax), Selling price per unit, Variable cost per unit. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the Target Profit Calculator use?
Target units = (fixed costs + target profit) ÷ (price − variable cost per unit), rounded up to a whole unit. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.
Can the Target Profit Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
Related tools
Calculate COGS step by step: COGS = beginning inventory + purchases − ending inventory.
Calculate Gross Profit step by step: Gross profit = net revenue − cost of goods sold.
Calculate Gross Margin step by step: Gross margin % = (net revenue − COGS) ÷ net revenue × 100.
Calculate Contribution Margin Ratio step by step: Contribution margin ratio = (sales − variable costs) ÷ sales × 100.
Calculate Break-Even Revenue step by step: Break-even revenue = fixed costs ÷ contribution margin ratio.
Calculate Margin of Safety step by step: Margin of safety % = (actual sales − break-even sales) ÷ actual sales × 100.