Target Costing
Claireshep2793
Registered Posts: 9 Regular contributor ⭐
Hi
Can anyone explain how target costing actually works? I can work out the cost per units for labour material and fixed costs, but how on earth do you actually get the target cost per kilo?
I have the Kaplan, BPP and Osborne books and I can't find a simple explanation in any of them
Thanks
Claire
Can anyone explain how target costing actually works? I can work out the cost per units for labour material and fixed costs, but how on earth do you actually get the target cost per kilo?
I have the Kaplan, BPP and Osborne books and I can't find a simple explanation in any of them
Thanks
Claire
0
Comments
-
Look at the target cost of the amount of material needed per unit
Then divide the cost by the material to find the target cost per kg
If a recipe requires 200g of material and the target (max) cost that this 200g can cost is £4.00
Then (as 200g is 0.2 kg) take the £4.00 and divide by 0.2kg to find the target cost of £20.00 per kg
Have looked at chapter 12 of:
Management and Cost Accounting for Dummies http://eu.wiley.com/WileyCDA/WileyTitle/productCd-1118650492.html
It even considers the maximum hours that should be used to make a product to keep the total cost within the target.Sandy
sandy@sandyhood.com
www.sandyhood.com0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership