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Hello sir
I hope you are fine
I have one question about closing the cost gapCompany sells a 1 product for 3$ and earn 20% profit
The supplier send the product in batch at selling price of 155$.supplier usually add 15% markup on cost…
What is cost gap in UNITS ?
ThanksUnits?….
Where is the question from?Because
Target cost = Target sales price – Target profit
Then the estimated costs of a product design can be compared with target cost. If the expected cost is higher than target cost then there is a ‘Cost Gap’.It is the difference between what an organisation thinks it can currently make a product for, and what it needs to make it for, in order to make a required profit.
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