Simple Formula Review Ch9

Question 0

What are the 3 ways to calculate target selling price

Answer 0

1. Full cost plus pricing
2. Absorption cost plus pricing
3. Variable cost plus pricing

Question 1

What is the formula to calculate target cost

Answer 1

Selling price - target roi= target cost

Question 2

What is the formula to calculate target selling price using full cost

Answer 2

1. Product costs = all costs
2. Determine markup percentage
   Desired ROI / costs = mp
3. Determine target selling price
   Cost +(costs x mp) = tsp

Question 3

How do you calculate the target selling price under absorption cost plus pricing

Answer 3

Cost = DM, DL, Vmoh, fmoh

Calculate mp
Desired roi + (v sell and admin + f s&ad) =mp x cost
- solve for mp

Cost + ( cost x mp)= tsp