target costing

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August 18, 2020 at 1:18 pm #581041
agnes222
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Dear Tutor,

If we are asked to suggest ways to reduce cost gap, then can we say that “reduce margin on selling price”? Would we be given credit for such an argument?

many thanks!
August 18, 2020 at 4:36 pm #581074
John Moffat
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No, you would not be given credit 🙁

Reducing the cost gap means looking for ways of reducing the cost of production, because the cost gap is the difference between the target cost and the estimated actual cost.
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