Chapter 9 Flashcards
(9 cards)
1
Q
Target cost
A
Target cost = market price - desired profit
2
Q
Target selling price
A
Target selling price = cost + markup * cost
3
Q
% ROI
A
% ROI = income / average amount invested in a product service
4
Q
Cost per unit
A
Cost per unit = total cost / budgeted volume
5
Q
Markup %
A
Markup % = desired ROI per unit / total unit cost
6
Q
Target selling price per unit
A
Target selling price per unit = total unit cost + (total unit cost x markup %)
7
Q
Minimum transfer price
A
Minimum transfer price = variable cost + opportunity cost
8
Q
Opportunity cost
A
Opportunity cost = ((selling price - variable cost) * units forgone) / units transfered internally
9
Q
Maximum transfer price
A
Maximum transfer price = external purchase price
