PEV 08 Task 2.3 Target Costing
Laura88
Registered Posts: 48 Regular contributor ⭐
Having seen on another discusion board, there seems to be a bit of a debate about this question.
The selling price was £25 and the company wanted to make a profit margin of 30%.
My answer was:
Selling Price £25 x 30% = £7.50 profit
£25 - £7.50 = £17.50 Target Price
We haven't done this is class, I have just learnt this from previous exam papers and revision.
Whats everyones thoughts?
The selling price was £25 and the company wanted to make a profit margin of 30%.
My answer was:
Selling Price £25 x 30% = £7.50 profit
£25 - £7.50 = £17.50 Target Price
We haven't done this is class, I have just learnt this from previous exam papers and revision.
Whats everyones thoughts?
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Comments
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I agree with you :001_smile:0
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Yeah you're right - I was lucky I read it in the BPP book just before the exam - nearly the identical question!0
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Yes, you're right I checked as soon as I came out of the exam!!!!0
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Well, I'm glad people agree with me! :thumbup: Because I thought that this was right until other people had stated differently on another discussion.
Good luck to everyone with their other exams this week. I've got DFS and PTC :thumbdown:0 -
Thats what I got too0
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Me too hehehehe!!0
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Me too! Still feel worried that it was wrong though... reading the other posts I mean!0
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PCR June 08 - Target costing
Morning all,
My three buddies and I got £17.50 for that final PCR question. Target costing is calculated by the selling price - anticipated profit = the target cost, so surely £17.50 is correct?
That's how I learnt it from the Osborne books anyway.
The rest of the exam I found so tough though, so even if this is right I don't know if it will save my skin :001_unsure:
Good luck to everyone for the rest of the week
Bex
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That's the correct answer based on the formula (17.50
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Thats what I got too, it was something that was covered in intermediate and briefly covered in class, I read about it the night before the exam, but I had to sit and think for a moment what was going on. But of course the £25 was 100%, so the target cost was going to be 70% of this leaving the 30% margin that they wanted.0
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I added the £7.50 on to the £25.00. I showed working so I hopefully I will get a mark for the £7.50 lol. I need all the marks I can get.0
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I added the £7.50 on to the £25.00. I showed working so I hopefully I will get a mark for the £7.50 lol. I need all the marks I can get.
Did the same Don....so yes you will pick up the mark on the £7.50. The stupid thing is in my workings I actually put £17.50!! lol! They will mark that and laugh.0
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