Setting a profit target is easy; knowing what it takes to reach it is the useful part. This calculator applies cost-volume-profit (CVP) analysis — the same method taught in managerial accounting — to turn a profit goal into a concrete number of units and a sales revenue target, then breaks that target down by month and week.
How to use the profit goal calculator
- Enter your profit goal for the period.
- Enter fixed costs for the same period: rent, salaries, insurance, loan payments.
- Enter the selling price per unit and the variable cost per unit.
- Optionally enter an income tax rate to treat the goal as after-tax profit.
- Choose whether the period is a year, quarter or month to get monthly and weekly targets.
Profit goal formulas
Worked example
A studio sells a product for $50 that costs $30 to make. Annual fixed costs are $90,000 and the owner wants $60,000 of profit.
Contribution margin = 50 − 30 = $20 a unit (40% of the price)
Units needed = (90,000 + 60,000) ÷ 20 = 7,500 units
Revenue needed = 7,500 × 50 = $375,000 — about 625 units a month or 145 a week
Break-even = 90,000 ÷ 20 = 4,500 units; profit margin at the goal = 60,000 ÷ 375,000 = 16%
If the $60,000 is meant after a 21% income tax, the pretax target becomes 60,000 ÷ 0.79 = $75,949.37, and the volume rises to (90,000 + 75,949.37) ÷ 20 = 8,297.47, rounded up to 8,298 units.
Units needed for different goals
With the same $90,000 of fixed costs and $20 contribution:
| Profit goal | Units | Revenue |
|---|---|---|
| Break-even ($0) | 4,500 | $225,000 |
| $15,000 | 5,250 | $262,500 |
| $30,000 | 6,000 | $300,000 |
| $60,000 | 7,500 | $375,000 |
| $90,000 | 9,000 | $450,000 |
| $120,000 | 10,500 | $525,000 |
Each extra $1,000 of profit requires 50 more units, because every unit beyond break-even adds its full $20 contribution to profit.
Making the target more achievable
- Raise the contribution margin. A $2 price increase lifts contribution to $22 and cuts the units needed for $60,000 of profit from 7,500 to 6,819.
- Lower variable costs. Cheaper shipping or materials has the same effect as a price increase, without asking customers to pay more.
- Trim fixed costs. Every $1,000 of fixed cost saved removes 50 units from the target.
- Check capacity. If 7,500 units is more than you can produce or sell, the goal needs a different plan, not just more effort.
The break-even calculator charts revenue and costs to show where profit starts, and the selling price calculator helps set a price that builds in a target margin.
Results are planning estimates. They assume price and costs stay constant across the volume range; actual results will vary.
Frequently asked questions
How many units do I need to sell to make a target profit?
Add the profit goal to fixed costs and divide by the contribution margin per unit (price minus variable cost). With $90,000 of fixed costs, a $60,000 goal and a $20 contribution per unit, you need (90,000 + 60,000) ÷ 20 = 7,500 units.
How do I set an after-tax profit goal?
Convert it to a pretax goal by dividing by 1 minus the tax rate, then use the usual formula. A $60,000 after-tax goal at a 21% tax rate needs $75,949 of pretax profit.
How is this different from break-even?
Break-even is the special case where the profit goal is zero. The profit goal formula adds the desired profit to the fixed costs that must be covered.
Why are units rounded up?
You can't sell a fraction of a unit, and rounding down would leave you slightly short of the goal. The calculator always rounds up to the next whole unit and also shows the exact revenue figure.