Rossini Ltd uses target costing and has designed a new machine that is estimated to sell on the market at a price of £10,280. The company wishes to make a profit margin of 20% and currently estimates from the design work undertaken that it will cost £8,640. Based on the above figures, what will the target cost gap be? a) £2,056 b) £8,224 c) £1,728 d) £416
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Rossini Ltd uses target costing and has designed a new machine that is estimated to sell on the market at a price of £10,280. The company wishes to make a profit margin of 20% and currently estimates from the design work undertaken that it will cost £8,640.
Based on the above figures, what will the target cost gap be?
-
a) £2,056
-
b) £8,224
-
c) £1,728
-
d) £416
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