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how can a person find target cost after being given market price of $3650,and the company adds 50% on variable cost.
For every 100 cost, the profit will be 50 and therefore the selling price will be 150.
Or, putting it the other way round, for every 150 selling price, the cost will be 100.So the target cost is 100/150 x 3650.
I do suggest that you watch our free lecture on target costing.
Our free lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exams well.
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