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Target costing

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

Comments

  • Pian32Pian32 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
  • MannaesiMannaesi Registered Posts: 61
    @Pian32 how did you get the 48pound of target cost per kilogram
  • Pian32Pian32 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
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