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Target Costing (Test-5)

This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.

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June 29, 2015 at 6:54 pm #259093
nelvin
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Dear Sir,

Can u pls explain how the Target Costing calculated ?

What does this mean “mark-up is 20% of cost ???

I checked the answers at the back of notes but still dont understand why TC calculated as 100/120×600 ???

please explain.

Thanks.
June 30, 2015 at 10:43 am #259127
John Moffat
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For every 100 cost,the profit is 20 and therefore the selling price is 120.

Or, writing it the other way round, for every 120 selling price the cost is 100.

So if the selling price is 600 then the cost is 100/120 x 600
June 30, 2015 at 11:37 am #259142
nelvin
- Topics: 43
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Thank you sir, I got it now.
July 24, 2015 at 5:13 pm #261763
John Moffat
Keymaster
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You are welcome 🙂
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