cost--100

1000% mark up Price 1100 tk

Market set the price already in a competitive market

Target price 100

Target cost= Target price - Target Profit

80.00 100-20
Actual cost is 90

Dell Office PC Target profit is 200 usd

Price 1000 usd per pc

cost 800
100 usd Accounting softwares
100 usd High res graphics card Gamers
100 usd built in high quality speaker

new cost 600

price 800
 $$$
cost 100
mark up 40%

price : cost plus mark up

= cost (1+mark up%)

100 (1+.40) 140

13-19

2016
Quantity Activty rate$ Activity cost $
Ordering 500 $ 50.00 $ 25,000.00
Rec & Storage 4000 $ 30.00 $ 120,000.00
Shipping 1500 $ 40.00 $ 60,000.00
Total Activity Cost= $ 205,000.00

$
Sales 250,000*$4 $ 1,000,000.00
- Cost of merchn s250,000*$3 $ 750,000.00
= Gross Margin $ 250,000.00
- Ind. Cost (ABC) $ 205,000.00
Net Op. Income $ 45,000.00

2017
 new sell price $ 3.80
New purch price $ 2.88

Quantity Activty rate$ Activity cost $

Ordering 200 $ 25.00 $ 5,000.00
Rec & Storage 3125 $ 28.00 $ 87,500.00
Shipping 1500 $ 40.00 $ 60,000.00
Total Activity Cost= $ 152,500.00

$
Sales 250,000*3.8 $ 950,000.00
- Cost of merchn s250,000*2.88 $ 720,000.00
= Gross profit $ 230,000.00
- Ind. Cost (ABC) $ 152,500.00
Net Op. Income $ 77,500.00

net op income per unit $ 0.31

achieved

13-29
$
Cap invested $ 10,000,000.00
Target ROI 12%
Target Profit $ 1,200,000.00

Q= 400,000 No of units

$$ SALES - TVC - TFC =

Vc per unit $ 5.00 per unit SALES REVENUE
Total VC $ 2,000,000.00
Total FC $ 1,600,000.00 per year
X= sell price per unit
Sales - VC - FC = Target Income
400,000*X -(400,000*5) -1,600,000 =1,200,000

X =12 Sell Price Per Unit

Total Figures
Q per unit figures $ $$
Sales 400,000 $ 12.00 $ 4,800,000.00
VC 400,000 $ 5.00 $ 2,000,000.00
CM $ 7.00 $ 2,800,000.00
FC $ 1,600,000.00
NOI $ 1,200,000.00

Mark up % = Total Sales - Total Costs $ 1,200,000.00

Total Costs $ 3,600,000.00

Sell Price per unit - total co $ 3.00

Mark up % =
Total Costs per unit $ 9.00

Profit per unit 3

Mark up % =
Total Costs per unit 9

Sell Price $ 13.00

New Sales units 360,000.00

Total Figures
per unit figures $ $$
Sales 360,000 $ 13.00 $ 4,680,000.00
VC 360,000 $ 5.00 $ 1,800,000.00
CM $ 8.00 $ 2,880,000.00
FC $ 1,600,000.00
NOI $ 1,280,000.00

Net op. profit (Return) $ 1,280,000.00

ROI=
Invested Capital $ 10,000,000.00

Profit per unit $ 3.56

Mark up % =
Total Costs per unit $ 9.44

13-37
75 UNITS
no.1
costs for 75 Sculptures Per Unit

Design $ 10,000.00
DM $ 80,000.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 187,500.00 $ 2,500.00

Profit = revenue - cost

Cost= Revenue - Profit
 TOTAL PER UNIT

Price at which
REVENUE or you want to sell $ 225,000.00 $ 3,000.00
Target Income= 20% of revenue $ 45,000.00 $ 600.00
Target Cost 80% of revenue $ 180,000.00 $ 2,400.00
Actual Cost $ 187,500.00 $ 2,500.00

no, it doesn’t meet the reqr

yes, Value eng. Is needed

no.2
costs for 75 Sculptures Per Unit

Design $ 11,500.00
DM $ 60,000.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 169,000.00 $ 2,253.33

Total Per Unit

Old Total Costs $ 187,500.00
- DM $ 20,000.00
+ design $ 1,500.00
New Total Cost $ 169,000.00 $ 2,253.33

TOTAL PER UNIT

REVENUE or Price at which yo $ 210,000.00 $ 2,800.00
Target Income= 20% of revenue $ 42,000.00 $ 560.00
Target Cost 80% of revenue $ 168,000.00 $ 2,240.00
Actual Cost $ 169,000.00 $ 2,253.33

NO!!

no.3
Revenue $ 210,000.00
Target Profit from Req 1 $ 45,000.00
Target Total Cost = ??? $ 165,000.00

costs for 75 Sculptures Per Unit

Design $ 10,000.00
DM $ 80,000.00 ????
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 187,500.00 $ 2,500.00

TOTAL COST = (187500-80000)+X

165,000 = 107500+X
X= 57500

Unit Selling Price

revenue - costs= profit Revenue
COSTS =REVENUE - PROFIT
Profit(calculated in
107500+DM=210000-45000 no.1
DM= 210000-45000-107500
DM $ 57,500.00 All cost Except DM
DM per unit $ 766.67 DM
TOTAL COST $ 165,000.00
per unit $ 2,200.00

PROVE!!!!
costs for 75 Sculptures

Design $ 10,000.00
DM $ 57,500.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 165,000.00
Abul Water
15 tk

Target ROI 10%

Invested Capital
1,000,000.00

Target income
100,000.00

Sales units
5,000 units

Profit per unit

20.00

Target profit is 200 usd

 2017

Sales
- Cost of merchn
= Gross Margin
- Ind. Cost (ABC)
Net Op. Income
 400,000

NOI
400,000*X
 Total Cost per unit
$ 3,600,000.00 $ 9.00

0.33333333333 33.33%

0.33333333333 33.33%

0.33333333333 33.33%

Total Cost per unit

 $ 3,400,000.00 $ 9.44

0.128 12.80%

0.3765 37.65%

Price/Revenue 100
Target Profit 20% of price/Revenue 20
Target Cost - 80% of price 80
another answer

75 units

SP
Target Profit/unit
Target Cost/unit
 75 @ $2800
Sculptures

Design
DM
Let X be the DM COST DL
V MOH
F MOH
F Mkt Costs
Total Costs

$ 2,800.00
$ 210,000.00

$ 45,000.00 TOTAL COST $ 165,000.00

$ 107,500.00
???????????
 Per Unit

????

$ 2,200.00
 COST 500 tk
Units Revenue
Price 1000 tk per unit 30,000 30000000
Customers are willing to pay 800 tk 80,000 64000000
 250,000*3.8 $ 950,000.00
250,000*2.88 $ 720,000.00
$ 230,000.00
$ 205,000.00
Op. Income $ 25,000.00
Mark up % = Total Profit
Total Costs

Profit per unit

Mark up % =
Cost per unit
$ 10,000.00
$ 57,500.00
$ 27,500.00
$ 10,000.00
$ 42,500.00
$ 17,500.00
$ 165,000.00
Profit
15000000
24000000
 cost--100
1000% mark up Price 1100 tk

Market set the price already in a competitive market

Target price 100

Target cost= Target price - Target Profit

80.00 100-20
Actual cost is $90

Dell Office PC Target profit is 200 usd

Price 1000 usd per pc

cost 800
100 usd Accounting softwares
100 usd High res graphics card Gamers
100 usd built in high quality speaker

new cost 600

price 800
 $$$
cost 100
mark up 40%

price : cost plus mark up

= cost (1+mark up%)

100 (1+.40) 140

13-19

2016
Quantity Activty rate$ Activity cost $
Ordering 500 $ 50.00 $ 25,000.00
Rec & Storage 4000 $ 30.00 $ 120,000.00
Shipping 1500 $ 40.00 $ 60,000.00
Total Activity Cost= $ 205,000.00

$
Sales 250,000*$4 $ 1,000,000.00
- Cost of merchn s250,000*$3 $ 750,000.00
= Gross Margin $ 250,000.00
- Ind. Cost (ABC) $ 205,000.00
Net Op. Income $ 45,000.00

2017
 new sell price $ 3.80
New purch price $ 2.88

Quantity Activty rate$ Activity cost $

Ordering 200 $ 25.00 $ 5,000.00
Rec & Storage 3125 $ 28.00 $ 87,500.00
Shipping 1500 $ 40.00 $ 60,000.00
Total Activity Cost= $ 152,500.00

$
Sales 250,000*3.8 $ 950,000.00
- Cost of merchn s250,000*2.88 $ 720,000.00
= Gross profit $ 230,000.00
- Ind. Cost (ABC) $ 152,500.00
Net Op. Income $ 77,500.00

net op income per unit $ 0.31

achieved

13-29
$
Cap invested $ 10,000,000.00
Target ROI 12%
Target Profit $ 1,200,000.00

Q= 400,000 No of units

$$ SALES - TVC - TFC =

Vc per unit $ 5.00 per unit SALES REVENUE
Total VC $ 2,000,000.00
Total FC $ 1,600,000.00 per year X= selling price
X= sell price per unit
Sales - VC - FC = Target Income
400,000*X -(400,000*5) -1,600,000 =1,200,000

X =12 Sell Price Per Unit

Total Figures
Q per unit figures $ $$
Sales 400,000 $ 12.00 $ 4,800,000.00
VC 400,000 $ 5.00 $ 2,000,000.00
CM $ 2,800,000.00
FC $ 1,600,000.00
NOI $ 1,200,000.00

Mark up % = Total Sales - Total Costs $ 1,200,000.00

Total Costs $ 3,600,000.00

Sell Price per unit - total co $ 3.00

Mark up % =
Total Costs per unit $ 9.00

Profit per unit $ 3.00

Mark up % =
Total Costs per unit $ 9.00

Sell Price $ 13.00

New Sales units 360,000.00

Total Figures
per unit figures $ $$
Sales $ 13.00 $ 4,680,000.00
VC $ 5.00 $ 1,800,000.00
CM $ 2,880,000.00
FC $ 1,600,000.00
NOI $ 1,280,000.00

Net op. profit (Return) $ 1,280,000.00

ROI=
Invested Capital $ 10,000,000.00

Profit per unit $ 3.56

Mark up % =
Total Costs per unit $ 9.44

13-37
75 UNITS
no.1
costs for 75 Sculptures Per Unit

Design $ 10,000.00
DM $ 80,000.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 187,500.00 $ 2,500.00

Profit = revenue - cost

 Cost= Revenue - Profit

TOTAL PER UNIT

Price at which
REVENUE or you want to sell $ 225,000.00 $ 3,000.00
Target Income= 20% of revenue $ 45,000.00 $ 600.00
Target Cost 80% of revenue $ 180,000.00 $ 2,400.00
Actual Cost $ 187,500.00 $ 2,500.00

no, it doesn’t meet the requirement

yes, Value eng. Is needed

no.2
costs for 75 Sculptures Per Unit

Design $ 11,500.00
DM $ 60,000.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 169,000.00 $ 2,253.33

Total Per Unit

Old Total Costs $ 187,500.00
- DM $ 20,000.00
+ design $ 1,500.00
New Total Cost $ 169,000.00 $ 2,253.33

TOTAL PER UNIT

 Price at which
REVENUE or you want to sell $ 210,000.00 $ 2,800.00
Target Income= 20% of revenue $ 42,000.00 $ 560.00
Target Cost 80% of revenue $ 168,000.00 $ 2,240.00
Actual Cost $ 169,000.00 $ 2,253.33

NO!!

no.3
Revenue $ 210,000.00
Target Profit from Req 1 $ 45,000.00
Target Total Cost = ??? $ 165,000.00

costs for 75 Sculptures Per Unit

Design $ 10,000.00
DM $ 80,000.00 ????
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 187,500.00

TOTAL COST = (187500-80000)+X

165,000 = 107500+X
X= 57500

Unit Selling Price

revenue - costs= profit Revenue
COSTS =REVENUE - PROFIT
Profit(calculated in
107500+DM=210000-45000 no.1
DM= 210000-45000-107500
DM All cost Except DM
DM per unit DM

TOTAL COST
per unit

PROVE!!!!
costs for 75 Sculptures

Design $ 10,000.00
DM $ 57,500.00
DL $ 27,500.00
V MOH $ 10,000.00
F MOH $ 42,500.00
F Mkt Costs $ 17,500.00
Total Costs $ 165,000.00
Abul Water
15 tk

Target ROI 10%

Invested Capital
1,000,000.00

Target income
100,000.00

Sales units
5,000 units

Target Profit per unit

20.00

Target profit is 200 usd

 2017

Sales
- Cost of merchn
= Gross Margin
- Ind. Cost (ABC)
Net Op. Income
 400,000

Target NOI
400,000*X
 Total Cost per unit
$ 3,600,000.00 $ 9.00

0.33333333333 33.33%

0.33333333333 33.33%

0.33333333333 33.33%
 Total Cost per unit
$ 3,400,000.00 $ 9.44

0.128 12.80%

0.3765 37.65%

Price/Revenue 100
Target Profit 20% of price/Revenue 20
Target Cost - 80% of price 80
another answer

75 units
SP
Target Profit/unit
Target Cost/unit

75 @ $2800
Sculptures

$ 2,200.00 Terget cost per sculpture

Design
DM
Let X be the DM COST DL
V MOH
F MOH
F Mkt Costs
Total Costs

TOTAL COST
???????????

Per Unit

????

$ 2,200.00
 COST 500 tk
Units Revenue
Price 1000 tk per unit 30,000 30000000
Customers are willing to pay 800 tk 80,000 64000000
 250,000*3.8 $ 950,000.00
250,000*2.88 $ 720,000.00
$ 230,000.00
$ 205,000.00
Op. Income $ 25,000.00
Mark up % = Total Profit
Total Costs

Profit per unit

Mark up % =
Cost per unit
$ 10,000.00
$ 57,500.00
$ 27,500.00
$ 10,000.00
$ 42,500.00
$ 17,500.00
$ 165,000.00
Profit
15000000
24000000