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Hello Sir, can you please tell me
Why the value of Target Costing depends heavily on having reliable estimates of Sales demand.?
It really depends on what the target is for the company in terms of how they are measuring their profit target.
A very common target is to earn a specific return on the capital invested and for this they need to know the expected revenue (which depends on the expected sales and the expected selling price).
I do show this by example in my free lectures on target costing.
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