[nasy]

hi john, this is how i was going about it.

for konje1. (40/140*7000)-7000

=2000-7000
-5000

konje2 (40/140*8000)-8000

=2285-8000

=-5714

=6500-5714

786

then i would basically ignore the negative signs.

[nasy]

can anyone assist me with the below. thanks in advance.

Vista Plc, a mobile phone manufacturer is facing increasing competition from manufacturers of high end smart phones from China. In response to the increased competition, they are considering production of two smart phone versions namely the Vista 100 and the Vista 200. The Marketing department has provided the following details for the two phones:

Phone Market price similar Phones,,,, Estimated production cost

Konje1. K 7,000.00 K 4,000.00

Konje2. K 8,000.00 K 6,500.00

In order for Vista Plc to achieve the return expected by its shareholders, a markup of
40% on sales of all phone sales is required.

Required:
a. Calculate the target cost and target cost gap for each of the two phones and explain the significance of your computations.

[Author]

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