[doria]

So please with OPENTUITION. Question 32 was exactly as Mr. Moffat explains in his Lecture of NPV, about TAX arrears, Expected vs Probabilities in this case to Costs Variables. I am so please with OPENTUITION and of course I felt confidente with the others question thanks to OPENTUITION. Thanks Mr. Moffat by your free lectures as I can not effort paying any expensive course. I do no say I have passed already but I feel confident.

[doria]

CAPM USE FOR ONLY ONE PERIOD. THIS PROJECT HAD MORE THAN ONE PERIOD.

[doria]

.U.

[doria]

LABOUR WAS SLACK. ENOUGH HOURS LABOUR.

MACHINE HOURS WAS DE LIMITATION. SO, IT WAS DE BOTTLENECK TO WORK WITH.

[doria]

T

[doria]

@ag1986 said:
Hi

In the simple example on page 6 of the OT lecture notes, when demonstrating how to calculate the target cost, you went through the full procedure:

-Calculate target return = 1,500,000
-Calculate expected revenue= 2,700,000
-Target cost = (expected revenue – target return)/ units produced

= 1,200,000 / 40,000 = $30 per unit

Yet in Example 1 on page 11, as per the answers, the target cost is arrived at by simply dividing the selling price p.u. by the mark up on cost

10.50 / 1.5 = $7.00 per unit

Can you please explain the difference in the 2 questions and why a different technique has been used in both?

Thankyou in advance…OT is a fantastic free resource…..

[Author]

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