TARGET COST QUESTION - OSBOURNE EXAM 2 - TASK 8

JSmith

Hi,

Please could someone help with how to calculate part B of this question (I can calculate part a):

Krisso

Increased Selling price is £20 + £2 =£22
To work out markup you know that cos is 100% so divide £22/125x100 =£17.60 for total costs which means profit per unit is £4.40
Variable costs per unit are £6 and that leaves £11.60 as target total fixed costs
Divide Fixed costs of £450,000 by the £11.60 and as it says you have to go to the nearest unit your answer should be 38,793