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# Target costing

Registered Posts: 61
hello good people,i just realised that i totally forgot target costing more especially on how materials is worked,i dont know if i forgot convertions or its wat,,,can someone help me on those

• Registered Posts: 157
Middle first. Current cost = 4+12*0.25+2*M = 7+2M
Cost target = 10- (25/100 * 10) = 7.50

Above obtained from. Profit Margin % = ((Sale-cost)/Sale ) *100

7.50 = 7 + 2M
M=0.25

Other question:

Sales Price per Unit = £90
Profit Margin per unit = 30%
Maximum total costs per unit = £63
Fixed cost per unit = £46
Labour Cost per unit= £5
Maximum material cost per unit = £12
Target Cost per Kilogram = £48
Current Quoted = £60
Minimum discount = 20%
AAT Level 4, MAAT
ACCA in progress
F4- Sitting Aug/September 2020
F6- Sitting September 2020
• Registered Posts: 61
@Pian32 how did you get the 48pound of target cost per kilogram
• Registered Posts: 157
@Mannaesi The required amount per unit is 250 grams. So the cost per unit of £12 needs to be scaled up to by 1kg's worth. So 12*4 = £48
AAT Level 4, MAAT
ACCA in progress
F4- Sitting Aug/September 2020
F6- Sitting September 2020