Finance Tools

Required Price Increase to Offset Cost Inflation Calculator

Calculate the required price increase to keep the same total profit after unit costs rise, assuming sales volume stays constant.

Calculate the required price increase to offset higher unit costs and keep the same total profit, assuming volume stays constant.

Baseline

This tool assumes units sold stay the same after the price change.

Baseline unit profit: $40.00 · Baseline total profit: $400,000
Cost inflation
Result

Required new price

New price: $106.00
Required increase: 6.00%

Profit check

Target profit: $400,000
Profit after: $400,000

The tool solves for the price that keeps total profit unchanged.

This holds total profit ($) constant assuming sales volume stays the same.

How it works

  • Baseline total profit = (price − cost) × baseline units.
  • New cost = cost × (1 + cost increase %).
  • Required unit profit = baseline total profit ÷ baseline units.
  • Required new price = new cost + required unit profit.

FAQ

Is this the same as “maintain margin”?
No. This maintains total profit ($) assuming volume stays constant. Maintaining margin % is a different goal.

What if volume changes after price increase?
Use the volume break-even tool (#1) or model both effects together.

How to use this required price increase to offset cost inflation calculator

  1. Enter your current price, unit cost, and baseline units sold.
  2. Enter the expected unit cost increase (%).
  3. Assume volume stays constant.
  4. See the required new price and required price increase to keep total profit unchanged.

Example

Price is $100, unit cost is $60, and volume is 10,000 units. Unit cost increases by 10%.

More tools in Finance Tools

← Back to Finance Tools

← Back to ToolPhi Home