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December 10, 2020 at 8:49 am
Can I do the 5th question in this way?
20% on cost. So cost+profit= sp
100 + 20 = 120 (assume cost as 100)
. . 20/120*600 = $100
600-100 = $500
Gap= 520-500 = $20
John Moffat says
December 10, 2020 at 9:13 am
Of course. It doesn’t matter how you do your workings.
December 10, 2020 at 10:54 am
Okay Sir. Thank you.
November 11, 2020 at 1:04 pm
Hey in Question 5, why are we clculating target cost by using the selling price when in the question it states that required mark up is 20% of cost and not selling price?
November 11, 2020 at 2:52 pm
The target cost is calculated from the selling price so as to give a mark-up of 20% on cost.
So the target cost is 100/120 x 600 = 500.
The actual cost is only relevant afterwards in order to compare with the target cost so as to arrive at the cost gap.
Did you watch the lecture before attempting the test?
October 2, 2020 at 10:12 pm
In Q5, Why cant we simply multiply 20% with $520 to get our profit figure and subtract it with the selling price to get the target cost?
October 3, 2020 at 7:45 am
That would be a meaningless exercise. The whole point of calculating the target cost is that we would then look for ways of reducing the production cost down to the target i.e. reducing the cost gap to zero.
Did you watch the free lectures before attempting this test?
January 13, 2021 at 5:22 pm
Hi sir,i was trying to open the quick quiz but its refusing,its jus showing a black screen.I want to attempt to the quick quiz but its failing to open
January 13, 2021 at 9:14 pm
Please try another browser like chrome or edge or safari
August 10, 2020 at 6:05 am
I scored 100% thank you for the questions
August 10, 2020 at 6:02 am
Sir please I want to ask if this working is correct even thou I arrived with the same answer.
SP = 600
And the required profit margin is 20% on cost . THIS MEANS that : COST + 20%
Where 20% = 0.2 therefore
In other to get SELLING PRICE this should be COST it self which is 100% + mark-up cost which is 20%
Therefore SP=cost x 120% and by finding the cost, Make COST the subject thin will become
COST = SP/ 120%
Cost Gap = 520 – 500
August 10, 2020 at 6:59 am
Yes – they are the same workings as the answer 🙂
August 10, 2020 at 10:13 am
Ok sir Thanks to You
May 5, 2020 at 10:32 pm
Hello, Sir please is the below correct?
Seems figures are not matching but landed correct answer somehow
600×20% = $120
Profit is 20/120 x 600 = 100
Cost gap is 120-100= $20
May 6, 2020 at 7:50 am
The fact it matches is a complete coincidence because your figures to not make sense.
The required mark-up is 20% of cost. Therefore the target cost to achieve this mark-up is 100/120 x 600 = 500.
The expected actual cost is 520.
Therefore the cost gap is 520 – 500 = 20.
April 12, 2020 at 9:35 am
100 % . Thank you for the lectures. A great initiative for people like us who cannot afford expensive classes.
March 6, 2020 at 1:57 pm
Thank you for the lectures
March 6, 2020 at 3:13 pm
Thank you for your comment 🙂
February 28, 2020 at 7:42 am
January 26, 2020 at 10:25 am
January 26, 2020 at 10:57 am
(But do make sure that you buy a Revision Kit from one of the ACCA approved publishers. Our tests are just meant to be quick checks after each chapter, but it is vital that you practice lots and lots of exam standard questions. The Revision Kits are full of both past exam and other exam standard questions in the various formats that they are asked in the exam.)
January 31, 2020 at 8:52 pm
thank you, I have scored 100%, you are so clear and understanding in your lectures, keep the good work up.
January 16, 2020 at 9:09 pm
100%. thanks for the lectures.
January 17, 2020 at 7:24 am
January 8, 2020 at 3:50 pm
January 7, 2020 at 8:06 pm
I think there is a mistake in one of the questions. The question says to calculate the target cost, but in the answer it is calculated the target cost gap by 300-250=50. Is 50 the target cost? I don’t think so. It is the question about 1.250.000 investment
January 8, 2020 at 6:50 am
The answer is correct. The selling price is $300 and the required profit is $250.
Therefore the target cost in order to achieve that profit is 300 – 250 = $50.
July 11, 2020 at 11:55 pm
I actually agree with you. It should be reworded and ask to calculate the target cost gap
July 15, 2020 at 9:41 pm
true,but if you look at the option,it is logical to think that we were asked to find cost gap. just a cliche trick in exam
July 15, 2020 at 9:53 pm
i just read the comments below and actually they really asked us to find target cost ,not target cost gap. you may think to work on it again. As the target cost will be the difference between actual cost and target cost. but in this question and workings, it showed us on how to find a target cost. Correct me if im wrong john
July 16, 2020 at 8:32 am
The target cost is not the difference between the actual cost and the target cost. The difference is the cost gap. The question specifically asks for the target cost – it is worded correctly and the answer is correct.
December 26, 2019 at 8:34 am
December 26, 2019 at 9:22 am
Very good 🙂
(But do make sure you have a Revision Kit from one of the ACCA approved publishers, because they have many more questions for you to practice on 🙂 )
November 21, 2019 at 10:34 am
The lectures are really helpful. Thank you
November 21, 2019 at 12:39 pm
September 14, 2019 at 5:29 am
hey john, just got 100%, you have made such concepts really very easy for me, just want to ask if i want to practice more this topics bpp exam kit is enough?
September 14, 2019 at 10:15 am
Yes, it is enough. You need to work through all the questions in the Revision Kit 🙂
September 3, 2019 at 7:50 pm
can you please tell me which publishers revision kit can i buy for pm?
September 4, 2019 at 11:13 am
Best is to buy from one of the ACCA Approved Publishers – they are BPP and Kaplan. (You will find a link on other pages of this website that will give you a 20% discount on BPP books)
August 10, 2019 at 7:47 pm
I have attempted and finished the 1st set of questions, but cannot seem to be able to move on to the next set of questions.
Could there possibly be a technical problem going on?
August 11, 2019 at 9:57 am
If you mean the questions on this page (testing on the lectures for chapter 2 of the notes), then the test is working fine.
August 12, 2019 at 4:16 pm
So is just these 5 questions that need to be done?
August 13, 2019 at 8:02 am
As explained in the introductory lecture for Paper PM, there is a short test to try for each chapter in our free lecture notes. However you need to practice far more question and should therefore buy a Revision Kit from one of the ACCA approved publishers.
August 3, 2019 at 11:20 am
Got 100% baby!
Thank You so much, I’m actually enjoying the notes, lecture videos and the practical quiz.
August 3, 2019 at 4:33 pm
May 26, 2019 at 9:07 am
Thanks for this valuable quiz. I got 8% of total score I failed to answer Q5
July 26, 2019 at 6:30 pm
SP=cost + profit(P)……(i)
let cost be X……(ii)
from the qn. profit is 20%of cost
then put (ii) & (iii) into (i)
Note SP=600 from the question
thus 600=X+20%X. find X
so the diff btn $520 & $500 is the gap
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