What is the formula to calculate target profit price?
submitted by Pune

nolan_ryan

Target profit = (Fixed costs Target profit) / Contribution margin per unit.That's how you set the selling price to cover all your costs and help you hit your profit goals.

Renson

To find out what you should sell your product for, you want to add your fixed costs to your target profit. Then, divide that by your contribution margin per unit.

watchitpal

You want to make a certain profit, so you take all your fixed costs plus that profit, then divide by how much you make from each sale after variable costs. That gives you your target price.