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What is target selling price using a target costing approach

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Reference no: EM132970710

PressNesso always use a target costing approach for their products and they have identified a cost gap of £8 per unit for their new EZT drinks machine. The current estimated variable production cost is £44 per unit and estimated total fixed costs are £60 million. The company requires a sales margin of 25% on all products (using full cost) and have budgeted total sales of the EZT of 10 million units.

Problem 1: What is the target selling price using a target costing approach?

Reference no: EM132970710

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