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How is target cost determined?
Target cost is determined by subtracting the desired profit margin from the target selling price. By understanding customer needs and competition, a company can set a competitive selling price. This allows the company to then calculate the target cost by subtracting the profit margin from the selling price.
What is a good net profit margin for a clothing company?
I know for a fact that Walmart tries to make 50 points on most of it's items at a minimum. As a small clothing retailer, I target a blended profit margin of 40 points, to keep my prices lower than the competition. I maintain a very minimal overhead.
How much sales are required to earn a target net income of 128000 if total fixed costs are 160000 and the contribution margin ratio is 40 percent?
Sales amount required is as follows: Required sales = (fixed cost + net income)/ contribution margin ratio required sales = 288000/.4 Required sales = 720,000 Prove: Sales = 720,000 Variable cost = 60% of sales = 432,000 Contribution margin = 288,000 Less: fixed cost = 160,000 Net income = 128,000
Give the definition of target profit pricing?
Target-Profit-Pricing Target-profit-pricing method involves identifying the price at which a product will be competitive in the marketplace, defining the desired profit to be made on the product, and computing the target cost for the product by subtracting the desired profit from the competitive market price Jason
What is Target return-on-sales pricing?
A firm may set an annual target of a specific dollar volume of profit, which is called target profit pricing.
Why is Haiti a target for earthquakes?
because it is very close to a plate margin
What is profit oriented objectives?
their main goal of course is to gain more profit for the target market.
What is target profit setting?
When a business or organisation sets a set target profit which they expect to acheive by the end of a month, quarter or year. For Example: An organisation such as a car dealership will set this as a target to their sales team to sell a set ammount of cars that month to enable them to reach their target profit This can be checked out by recording the sales and looking at a cashflow forecast.
What is the difference between market oriented pricing and company oriented pricing?
it could be that market orientated pricing is where you look at your target market and see what sort of prices they will be prepared to pay. Whereas company orientated pricing is i guess when the company look at their costs and sort out a profit margin and work out the price that they are going to charge to make sure that they are going to make profit.
What is the difference between target costing and cost-plus pricing?
Target Costing: It is the costing process in which company tries to reduces all costs of product to limit the selling price at specific targeted selling price. Cost Plus pricing: It is pricing method in which company uses all costs plus certain percentage of that cost as a profit margin to set selling price.
What is the target in bakeries?
The usual goal (target) in bakeries is to produce excellent baked goods that customers want to buy and thereby to earn a profit.
How do you determine the best way to set a price for a product?
To determine the best price for a product, businesses typically consider factors such as production costs, competition, target market, and desired profit margin. Conducting market research and analyzing consumer behavior can also help in setting a competitive and profitable price.
