OpenTuition.com Free resources for accountancy students
Free ACCA lectures and course notes | ACCA AAT FIA resources and forums | ACCA Global Community
Sir can u plz tell me how we got the Target cost=7 in the (a) part example 1 of life cycle costing
as far as i think( 6 p.u )=manufacturing cost + design development cost 60000/50000= (1.2 p.u) …so it should be 7.2 p.u
and i do not know whether we should consider end of life cost when computing the target cost. Kindly make it clear what costs to be considered in target costing
sorry m confused but need to know how we got mark up 50% = 3.5
The target cost is calculated as the maximum cost we can have if we are to make the target profit.
Here, the selling price is 10.50 and we want the profit to be 50% of cost.
If the target cost is x then we want profit of 0.5x and so the selling price will be 1.5x
If 1.5x = 10.50, the x = 7.00 (the target cost)
excuse me! but how we got 1.5x selling price
ohk thnx i just figured it out!!! cost+profit= selling price i.e 1x + 0.5x=1.5x
Sir can you please explain what’s happening in part c of this question? I don’t get why $2.20 of cost per unit didn’t include the original manufacturing cost? And the fact that the new manufacturing cost is calculated by subtracting this cost per unit (2.20) from the target cost (7)? Don’t get the logic
I will explain it a different way.
The target cost is $7 – that is the cost we are aiming for if we are going to make the required profit.
At the moment, the lifecycle cost is $7.80 per unit, and so we need to reduce it by $0.80 to get down to our target,
Paying an extra $20,000 for design will itself put up the lifecycle cost by 20,000/50,000 = 0.40 per unit – so it will go up to $8.20 per unit.
To get down to the target of $7 per unit, we therefore need to reduce the lifecycle cost by $8.20 – $7 = $1.20.
Currently the manufacturing costs are $6 per unit, and so reducing them by $1.20 means that we need to bring them down to $4.80 per unit.
where does $34 estd cost comes from?
I invented a figure for the actual cost in order to explain what is meant by the cost gap.
In an exam question you would be expected to calculate the actual cost from information in the question, but this is basic costing – not target costing. Target costing is simply calculating the maximum cost in order to achieve the objective.
Good lecture. Pls, I don’t understand how the actual cost of $34 is derived.
Pls, kindly clarify me. Thank you
I think the $34 is a figure he made up to explain how a cost gap can occur and how to go about closing the cost gap.
this lecture has funny sound. its studio recorded so i was hoping for excellent audio.
I find it just fine, where is the funny sound?
what’s the name of the lecturer? he’s sooooooo good at explaining.
Is it possible for open tuition to solve a standard exam question on every topic treated? this will help a lot.
There are already quite a lot of recorded solutions to past exam questions on the website – you can find them here: http://opentuition.com/acca/f5/f5-revision-kit/
Thanks for the fantastic lectures, i am receiving “Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com:80/play” error all the times today, I should try many times to be able to watch a video. please see if the problem is from the servers.
iphones don’t have flash, this is why
@fabiangrey, lectures play without flash – if your phone support mp4 playback – iphone does, so work fine on iphone,
admin i have iphone how can i see the video lectures????plzzz help me i can’t see video lectures on iphone .
@zain25, lectures play OK on iphone and ipad. I am really not sure why you have problems? if on wifi does not work, try on 3g..
@admin, bro iphone doesnot support flash sites …
websites runs very well on it but video does not play on it .
please tell me the way how u look lectures on iphone
@zain25, The lectures play without flash. if your browser support MP4 (and Safari on iPhone/ipad supports it and lectures work fine)
@johnmoffat, bro no its not working … i tried a lot . they are giving me message that flash videos are not supported ….i have done it my times but same result iphone safari is not opening the videos . site is opening fine but video lectures are not running on safari
@zain25, LIke I said before, all Lectures WORK on the iPhone
Safari on the iPhone/Ipad does not need flash player for the lectures to work
@admin, sorry admin u r not understanding the problem .
i have iphone 3gs and safari is not running the lectures i opened it many time its not working
@zain25, Lectures work fine on phone 4 and ipad 2
and I am 99% sure, in the same way they work on iphone 3gs.
- but since I don’t have 3gs, can’t verify it.
however, i would tend to think problem might be somewhere else..
send me some screenshots of your screen with those errors from your phone, email@example.com (to create screenshot press home and power buttons at the same time)
What happen if the target cost > estimated actual cost?
What we would do?
1. Increase profit
2. Decrease price
3. add more equipment to goods
Please tell me about effect if we do that option
@drhong0000, If the target cost is more than the actual cost then there is no problem!!!
It does mean that the company can afford to reduce the selling price, but they will only do this if they think that they will sell more and that therefore their total profit will increase.
@drhong0000, here’s a relevant case study on how India’s Tata Nano used target costing to make the world’s cheapest car by cutting down costs to meet its targeted selling price. http://streamlinesupplychain.wordpress.com/2008/02/02/tata-nano-and-the-supply-chain/
i cant see the lectures
there is some distortion in audio
You must be logged in to post a comment.
ACCA F1 / FIA FAB Dec 2013 Exam was...
ACCA F2 / FIA FMA Dec 2013 Exam was...
ACCA F3 / FIA FFA Dec 2013 Exam was...
F4 Dec 2013 Exam was... Post comments
F5 Dec 2013 Exam was... Post comments
F6 Dec 2013 Exam was... Post comments
F7 Dec 2013 Exam was... Post comments
F8 Dec 2013 Exam was... Post comments
F9 Dec 2013 Exam was... Post comments
P1 Dec 2013 Exam was... Post comments
P2 Dec 2013 Exam was... Post comments
P3 Dec 2013 Exam was... Post comments
P4 Dec 2013 Exam was... Post comments
P5 Dec 2013 Exam was... Post comments
P6 Dec 2013 Exam was... Post comments
P7 Dec 2013 Exam was... Post comments
Return to top of page
Copyright © 2013 · Privacy and Cookies · Advertising · Contact us · Sitemap · Log in