Two-dimensional graph

File:CVP-TIS-FC-Contrib-PL.svg

Target Income Sales can be computed as the point where Contribution equals Fixed Costs plus Target Income.

In cost accounting, Target Income Sales are the sales necessary to achieve a given Target Income (or Targeted Income). It can be measured either in units or in currency (sales proceeds), and can be computed using contribution margin similarly to break-even point:

$\begin{array}{rlrl}& \text{Target Income Sales (in Units)}& & =\frac{\text{Fixed Costs}+\text{Target Income}}{\text{Unit Contribution}}\\ & \text{Target Income Sales (in Sales proceeds)}& & =\frac{\text{Fixed Costs}+\text{Target Income}}{\text{Contribution Margin Ratio}}\end{array}$

See also

• Break-even
• Cost-Volume-Profit Analysis