- This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
- You must be logged in to reply to this topic.
Instant Poll - Read and post comments:
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Q) The selling price of a product has been set at $600 per unit,and at that price company the company expects to sell 5,000 units per month. The required mark-up is 20% of cost, and the expected production cost is $520 per unit. What is the target cost gap?
Please provide me the solution at your earliest convenience.
The target cost is 100/120 x 600 = 500.
Therefore the cost gap is 520 – 500 = 20.
The free lecture on target costing explains how to deal with mark-ups.
You are welcome 🙂