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chapter 4 ,Test your understanding 6 ,study text
how did we got that the target cost is $181.82
The maximum price is $200, this includes a mark up of 10%
So the $200 is 110% of the cost.
This means that to find the cost of the unit you have to divide $200 by 110 and multiply by a 100.
200/110 * 100 = 181.82
Or alternatively you have to divide $200 by 1.1 because the selling price includes the 10% mark up.See if you do it the other way as you would to with a mark-up of 10%
181.8181* 1.1 = $200
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