In the break-even point, sales and costs are exactly the same. Still, the break-even point is not the goal in most of the companies. In contrast, managers of a company seek to maximize profits. Modifying the break-even equation, the volume of sales required to earn an amount desired or expected profit can be estimated. For this purpose, a target profit factor is added to the break-even equation as follows:

Fixed Costs + Target Profit Sales (units) = ----------------------------------                                                      Contribution margin per unit

        To illustrate, assume that fixed costs are estimated at $ 200,000, and target profit is $100,000. The sales unit price, variable unit cost, and contribution margin per unit would look like this:

      Unit price                         $75
(-)  Variable unit cost               45
=   Contribution margin of $ 30 per unit

        The sales volume needed to win the targeted profit of $100,000 are 10,000 units. This is calculated as follows:

$200,000 + $100,000 Sales (units)  =  ----------------------------------  =  10,000 units                                                            $30

        The following income statement confirms the above:

Sales (10,000 units X $75)	$750,000
(-) Variable Costs (10,000 X $45)	450,000
Contribution margin (10,000 X $30)	$300,000
(-) Fixed Costs	200,000
Operational Income	$100,000