Life-Cycle Costing

This topic has 3 replies, 2 voices, and was last updated 12 years ago by John Moffat.

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March 8, 2014 at 12:50 pm #161788
Debajyoti
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Hi,
Please explain how did you calculate the Target Cost (i.e $7.00 per unit) in example 1(a) in chapter 3.

Best
Dev
March 8, 2014 at 2:24 pm #161791
John Moffat
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The selling price is to be $10.50.
The target mark-up is 50% of cost.

So if the target cost is X, the profit will be 0.5X and so the selling price will be 1.5X.

If 1.5X = 10.50, then X = $7
March 9, 2014 at 1:16 pm #161832
Debajyoti
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Thanks for your help.
March 9, 2014 at 2:02 pm #161834
John Moffat
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You are welcome 🙂
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