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175 units across three prices
The first 100 units are 24 each. The next 50 are 20. The last 25 are 16. Those prices are an example. Publication 334 does not publish a discount schedule, and a GSA offer uses the ranges on that offer.
Tier 1 units: 25% lower
Change tier 1 units to 75 units while keeping the other example values the same.
Tier 1 units: 25% higher
Change tier 1 units to 125 units while keeping the other example values the same.
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Quick answer
What does the Volume discount revenue calculate?
What do tiered prices collect on one order? This calculator uses tier 1 units, tier 1 price, tier 2 units, tier 2 price, tier 3 units, and tier 3 price to estimate each tier’s price times its own units immediately in your browser.
With the values currently entered, the result is $3,800.00 — from the three tiers. It also shows tier 1 receipts, tier 2 receipts, tier 3 receipts, average price, and all units at the last filled price.
How to use the Volume discount revenue
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Tier 1 units — entered in units
- Tier 1 price
- Tier 2 units — entered in units
- Tier 2 price
- Tier 3 units — entered in units
- Tier 3 price
Volume discount revenue formula
Revenue = tier 1 price × tier 1 units + tier 2 price × tier 2 units + tier 3 price × tier 3 units.
Assumptions
- IRS Publication 334 counts the amounts a business takes in as gross receipts. Each tier’s receipts are its price times the units in that tier. The page adds the three receipts. The prices in the boxes are an example, not a schedule from the publication.
- GSA’s Schedules Input Program stores a quantity or dollar-volume break as a start range, an end range, and a discount price for that range. The first range starts above 1, because quantity 1 uses the base price. Many schedules then apply one price to the whole order. The last line prices every unit at the last tier that still has units, so you can compare that reading with the tier-by-tier total.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Chapter 7 figures gross profit as net receipts minus cost of goods sold. It then tests accuracy as that profit divided by net receipts, compared with the markup policy.
Quantity and volume discount breaksUS General Services Administration — Schedules Input ProgramScope: Federal supply schedule price filesStores a quantity or dollar-volume discount as a start range, an end range, and a discount price for that range. The first start range is above 1, because quantity 1 uses the base price.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Volume discount revenue example and edge cases
Volume-discount revenue adds what each tier collects. A tier’s receipts are its price times the units in that tier. IRS Publication 334 counts those receipts in gross receipts. You type the units and the price for each tier.
Example: 175 units across three prices
The first 100 units are 24 each. The next 50 are 20. The last 25 are 16. Those prices are an example. Publication 334 does not publish a discount schedule, and a GSA offer uses the ranges on that offer.
- Tier 1 units
- 100 units
- Tier 1 price
- 24
- Tier 2 units
- 50 units
- Tier 2 price
- 20
- Tier 3 units
- 25 units
- Tier 3 price
- 16
Calculated result$3,800.00from the three tiers
The three tiers collect 2,400, 1,000, and 400. Revenue is 3,800, and the average price is 21.71. Pricing all 175 units at the last tier’s 16 would collect 2,800.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 3,800 first. It is 100 times 24, plus 50 times 20, plus 25 times 16. The average of 21.71 is 3,800 divided by 175 units.
- GSA’s Schedules Input Program stores each break as its own range and its own price. On many schedules the price for the range an order reaches applies to every unit. The 2,800 line is that reading at the last filled tier. The 3,800 line prices each tier’s own units.
Edge cases worth checking
A tier is empty
Set that tier’s units to 0. Its receipts drop out, and the all-units line uses the last tier that still has units. A zero price with units still in the box treats those units as free.
The contract uses one price for the whole order
If the contract gives one price to every unit once you pass a quantity, use the all-units line, or put every unit in one tier and leave the others at 0. On this example the two readings differ by 1,000.
What changes the result most
Tier 1 units
Use the count you expect in real life. Round up when a partial units cannot be purchased or used.
Tier 1 price
Use a current amount for tier 1 price. Include fees or recurring costs that belong in the same figure.
Tier 2 units
Use the count you expect in real life. Round up when a partial units cannot be purchased or used.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Tier 1 units: 25% lower
75 units$3,200.00from the three tiers
Tier 1 units: 25% higher
125 units$4,400.00from the three tiers
Tier 1 price: 25% higher
30$4,400.00from the three tiers
Common mistakes
Check tier 1 units
IRS Publication 334 counts the amounts a business takes in as gross receipts. Each tier’s receipts are its price times the units in that tier. The page adds the three receipts. The prices in the boxes are an example, not a schedule from the publication. Make sure this matches the number you enter.
Keep tier 3 price consistent
GSA’s Schedules Input Program stores a quantity or dollar-volume break as a start range, an end range, and a discount price for that range. The first range starts above 1, because quantity 1 uses the base price. Many schedules then apply one price to the whole order. The last line prices every unit at the last tier that still has units, so you can compare that reading with the tier-by-tier total. Use the same units and time period throughout the calculation.
Do not rely on one volume discount revenue scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What do tiered prices collect on one order?
It does not replace a quote, contract, accountant, or local employment guidance.