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could you kindly explain what the different between cost plus costing and mark up in the target costing
of example if the company us cost plus costing and want profit 20% the selling price 2$
and the the company use mark up 15% on cost
how should i calculate the profit base on desire profit 20% or mark up 15%
i am really struggling with PM i tried all the questions in kaplan and BPP exam kit and i was able solved most of them but every time i sit the PM exam it like i am sitting the exam for different and new syllabus .
would you kindly advise what should i do?. i want to sit the exam with confident to score at lease 70% because if i aimed just to 50 % i will never pass.Have you sat the exam recently?
If so, how do you know how well you have done?Or when do you intend to sit it again?
Anyway I will try to help
Cost-plus pricing or (mark-up pricing)
You calculate the average cost of production and then add a predetermined (agreed) percentage mark-up or profit margin. Which is:
Markup – involves adding a percentage to the cost to determine the selling price.
Margin -The total cost of production and then add a desired profit margin to determine the selling price.Mark up 20% on 100 cost = 100 * 1.2 = 120 selling price
Mark up 15% on cost is x * 1.15 so if it’s 100 cost it is 115Margin of 20%
So convert 20% to a decimal 0.2
Subtract from 1
So it becomes 0.80100 / 0.8 = 125
For profit base you need to
If you want a profit of 20 based on a 20% profit margin, the selling price would be 100.20/0.2 = 100
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