ABC company follows target costing approach, they normally expect to pay 30% return on investment to their investors. After the market survey of the new product that estimated that if they price the new product at OMR 120 then they can make a profit of 30% on their sales. What should be the target cost in this situation? a. OMR 84 b. OMR 36 c. OMR 30 d. OMR 156
ABC company follows target costing approach, they normally expect to pay 30% return on investment to their investors. After the market survey of the new product that estimated that if they price the new product at OMR 120 then they can make a profit of 30% on their sales. What should be the target cost in this situation? a. OMR 84 b. OMR 36 c. OMR 30 d. OMR 156
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter5: Activity-based Costing And Management
Section: Chapter Questions
Problem 16MCQ: Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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21. ABC company follows target costing approach, they normally expect to pay 30% return on investment to their investors. After the market survey of the new product that estimated that if they price the new product at OMR 120 then they can make a profit of 30% on their sales. What should be the target cost in this situation?
a.
OMR 84
b.
OMR 36
c.
OMR 30
d.
OMR 156
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