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Solution to Target Cost Example 1 (a) -Chapter 3 Life-Cycle Costing

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  • April 23, 2020 at 3:25 am
    Solution to Target Cost Example 1 (a) -Chapter 3 Life-Cycle Costing 2
    kwilliams
    Participant

    I am a bit unclear for the captioned solution.

    I thought that the 100/150 * Selling Price of $10.50 should give the desired profit required and not the target cost.

    So I went further to subtract the $7 from the S.P of $10.50.

    Please help me to better understand this concept/approach.

    KD.

    April 23, 2020 at 11:26 am
    Solution to Target Cost Example 1 (a) -Chapter 3 Life-Cycle Costing 3
    John Moffat
    Keymaster

    I work through the examples in my free lectures. There is no point at all in using the notes without watching the lectures. The notes are lecture notes and it is in the lectures that I explain and expand on the notes.
    If you are not watching the lectures for any reason then you must buy a study text from one of the ACCA approved publishers and study from there.

    The profit is 50% of the cost. How on earth can the cost be $3.50 and the profit be $7?
    $7 is not 50% of $3.50 !!!!

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