What price do you need to hit a profit goal at a given volume? Rearrange the profit equation to solve for price — a clean formula that beats trial-and-error.
The example
Fixed $10k, variable $15, 1,000 units, want $5,000 profit.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Profit target | $5,000 |
| 3 | Required price | $30.00 |
The formula
Solve the profit equation for price:
How it works
Rearrange profit = units×(price−variable) − fixed:
- Start from
profit = units × (price − variable) − fixed. - Solve for price:
price = (fixed + profit) / units + variable. - The first term spreads fixed costs and the target profit over the units; adding variable cost completes the price.
- It’s exact — no Goal Seek needed when the model is this clean.
Cross-check with margin: at the solved price, the contribution margin is price − variable, and units × CM − fixed should equal your target. A quick sanity formula catches setup errors.
Try it: interactive demo
Set the model and profit target.
Variations
Break-even price
Target = 0:
Required units at a price
Solve volume instead:
Sanity check
Should equal the target:
Pitfalls & errors
Zero units divides by zero. Guard the volume input.
Check the market. The math gives a required price; whether customers will pay it is a separate question.
Fixed vs variable split. Misclassifying a cost throws off the price — only truly per-unit costs are “variable.”
Practice workbook
Frequently asked questions
How do I find the price needed for a target profit in Excel?
What price gives break-even?
How do I check the price is right?
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