🎯Cost-Volume-Profit (CVP) Analysis
Target Profit (Units)
(Fixed Costs + Target Profit) ÷ Contribution Margin per Unit = Units Needed
What It Means
How many units to reach a specific profit goal.
Example
Fixed Costs:$100,000
Target Profit:$50,000
CM per Unit:$40
($100,000 + $50,000) ÷ $40
Units Needed = 3,750
Related Formulas
Contribution Margin per Unit
Sales Price per Unit - Variable Cost per Unit = Contribution Margin per Unit
Contribution Margin Ratio
Contribution Margin ÷ Sales × 100 = CM Ratio %
Break-Even Point in Units
Fixed Costs ÷ Contribution Margin per Unit = Break-Even Units
Break-Even Point in Sales Dollars
Fixed Costs ÷ Contribution Margin Ratio = Break-Even Sales $
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