Target Profit Pricing
Free Target Profit Pricing calculator with clear step-by-step results.
About Target Profit Pricing
Target-profit pricing sets the price needed to hit a profit goal at forecast volume.
Formula
Formula
Price = variable cost + (fixed costs + target profit) ÷ units
Worked example
With the default values below, Target Profit Pricing returns Required Price per Unit of $32.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Fixed costsminimum 0 $
- 30,000 $
- Target profitminimum 0 $
- 10,000 $
- Variable cost per unitminimum 0 $
- 12 $
- Expected units soldminimum 1
- 2,000
Results
- Required Price per Unit
- $32.00
- Total Contribution Needed
- $40,000.00
- Contribution per Unit
- $20.00
Step by step
- 1Values used
- 2Formula
- 3Required Price per Unit= $32.00
- 4Total Contribution Needed= $40,000
- 5Contribution per Unit= $20.00
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How does this calculator work?
Target-profit pricing sets the price needed to hit a profit goal at forecast volume.
Why does this matter?
If volume misses, the required price rises.