Which of the following best describes “target costing”?


Which of the following BEST describes target costing? Setting a cost for the use in the calculation of variances Setting a se
Information relating to two processes (F and G) was as follows: Process F G Normal loss as % of input 8 5 Input (litres) 65,0
The following budgeted information relates to a manufacturing company for next period: Production Sales Units 14,000 12,000 F
The Eastland Postal Service is government-owned. The government requires it to provide a parcel delivery service to every hom
Under which sampling method does every member of the target population have an equal chance of being in the sample? Cluster s
A company manufactures and sells one product which requires 8 kg of raw materials in its manufacture. The budgeted data relat
Up to a given level of activity in each period the purchase price per unit of a raw material is constant. After that point, a

Answer

1) option d. In Target costing we deduct profit margin from selling price to arrive at Target cost. All other options provide irrelevant information.

2) Process F

Normal loss = 65000*8%=5200

Input after normal loss = 65000-5200= 59800

Output= 58900

Abnormal loss = 59800-58900=900

Process G

Normal loss =37500*5%=1875

Input after normal loss =35625

Output=35700

Abnormal gain= 35700-35625 = 75

3) the profit will be 36000 only.

4) difference in prices charged since one company is regulated by government & cannot charge more than price specified by government whereas other company can price according to its own desire.

5) random sampling is the sampling in which every member has a chance of being selected randomly

6)Next year production of finished good will be = 3000+19000-4000= 18000

Each unit require 8kg of Raw Material so 18000 uts will require 18000*8= 144000

For raw materials I have 50000kg in stock . I will require 144000kg in total to produce 18000kg. So I have to purchase = 144000-50000+53000= 147000kgs

7) option a is correct.

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