Target Profit Calculator
Target Profit Calculator
Component |
Description |
Fixed Costs |
The total fixed costs that do not change with the level of output. |
Variable Costs |
The total variable costs that vary with the level of output. |
Sales Price per Unit |
The price at which each unit is sold. |
Target Profit |
The desired amount of profit to be achieved. |
Break-Even Point |
The level of sales at which total revenue equals total costs, resulting in zero profit. |
Formula |
Break-Even Point = (Fixed Costs + Target Profit) / (Sales Price per Unit – Variable Costs per Unit) |
Purpose |
Used to determine the required sales volume to achieve a specific target profit. |