Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Calculate the selling price needed to cover variable cost, fixed cost, target profit, commissions and tax.
Pricing assumptions
Required pre-tax price per unit
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Customer price including tax
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Required contribution per unit
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Calculation guidance will appear here.
How This Is Calculated
This calculator works backward from a target profit goal to the selling price needed — starting with required contribution per unit (fixed costs plus target profit, divided by expected unit volume), then adding variable cost and adjusting for any sales commission percentage (which reduces net proceeds per sale) to arrive at the price that achieves the target after commission.
Frequently Asked Questions
Why does sales commission affect the calculated price?
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Because commission is typically a percentage of the selling price, it reduces what the business actually nets per sale — pricing without accounting for commission would fall short of the target profit once commissions are paid out, so the price must be grossed up to compensate.
What happens if target profit and volume assumptions turn out to be wrong?
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The calculated price is only as good as its underlying assumptions — if actual volume comes in lower than assumed, the fixed-cost recovery per unit will be understated, meaning actual profit will fall short of the target even at the calculated price.
Scope: Computes the selling price (or sales volume) required to hit a specified target profit, given fixed costs, variable cost per unit and the target profit amount.
Calculation logic
Target sales volume (units) = (Fixed costs + Target profit) ÷ Contribution margin per unit (Selling price − Variable cost per unit).
Alternatively, given a target volume, solve for the required selling price: Price = (Fixed costs + Target profit) ÷ Target volume + Variable cost per unit.
Where a target profit percentage (margin on sales) is specified instead of an absolute amount, the calculator solves the same equations with Target profit expressed as a function of the resulting sales value.
Inputs and assumptions
Extends the standard break-even (cost-volume-profit) model by adding a non-zero target profit rather than solving only for the zero-profit point.
Assumes fixed costs and variable cost per unit remain constant at the volumes being solved for.
Exclusions and edge cases
Does not model tax on the target profit — this is a pre-tax pricing/volume target.
Does not account for competitive/market price ceilings — the computed price is what is mathematically required to hit the target, which the business must then assess against what the market will bear.
Sources
No external regulatory source applies — this is a general financial formula, not a statutory computation.
Review status: reviewed and approved by CA Nikhil Gupta on 18 July 2026.