Result
Required revenue
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Required revenue = (fixed costs + target profit) ÷ (contribution margin ratio ÷ 100). This extends the ordinary break-even point: there, revenue only covers fixed costs; here it also covers a target profit on top.
The logic is simple: the contribution margin ratio shows what share of every dollar of revenue survives variable costs and goes toward covering fixed costs and profit. To find the required revenue, divide 'fixed costs + target profit' by that share.
The calculation assumes the margin ratio doesn't change with sales volume — i.e. price and variable cost per unit stay constant. If you need the result in units rather than money, use the separate sales volume needed for a target profit calculator.