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hello sir, i didnt understand that calculation used when you showed it in the lecture video
Realistic selling price of $50, / Profit of % on cost.
then you went on to calculate the selling price as 125
cost=100
profit=25
————-
S.p=125but isnt our target selling price $50?
I did not say that the selling price is 125 !!!
I was simply doing a cost structure (in the same way as we do in Paper F3) and calculating that for every 125 selling price then the cost would be 100.
So the target cost is 100/125 x $50.
You can of course calculate it any way you want to, provided that you end up with a cost that gives the required mark-up as against the selling price.
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