Target Profit Analysis

The Target Profit Analysis is used to determine  an estimate of sales volume is needed to achieve a certain profit target. In other words if an owner would like to know how much he would have to sell of a product to reach a target profit of a certain amount. to find this out we can use the formula Method: Unit sales to attain the target profit = Target profit + Fixed expenses divided by the unit CM. Now that you know how to get the amount of units sold, how do we calculate the the dollar sells needed to attain the target profit? Use the units sold to attain target profit multiply by the unit selling price. Another way is to use this formula Profit = CM ratio multiply by sales minus the fixed expenses.