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John Moffat.
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John1998m
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Is it correct that estimated actual cost is calculated by taking direct material, direct labour and overheads and any all the other costs involved in the production process of the product?
Target costing is a method to set the maximum target cost in order to achieve required profit margin while we compare that with actual cost incurred to see how much is the target cost gap.
If Target cost < Actual cost = Target cost gap
John Moffat
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That is correct, and is all explained in my free lectures on target costing.
John1998m
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