
Target Costing:
Target costing is based on the principle that the product cost is computed for variable or total cost (based on the management policy) on the basis of actual cost incurred and also the costing based on market retail price is computed by deducting the target income from that product.
The target product cost computed on product retail market price is compared to the actual product cost so as to analyze the difference in the costing and to analyze whether the business is able to market its product.
Requirement:
The computation of Target full product cost.
Requirement2:
To analyze whether the business is able to achieve the target income.
Requirement3:
The Computation of new target fixed cost and analyzing whether reduced variable cost able to achieve the target income.
Requirement4:
The computation of cost plus price of the product.

Want to see the full answer?
Check out a sample textbook solution
Chapter 26 Solutions
Horngren's Accounting
- Garrison Polymers produces synthetic materials used in the manufacturing of electronic components. In 2015, its first year of operations, Garrison produced 5,000 tons of synthetic material and sold 3,200 tons. In 2016, the company produced the same amount and sales were 6,000 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton were $500, and variable selling expenses were $700 per ton. Fixed manufacturing costs were $5,000,000, and fixed administrative expenses were $600,000. What is the net income under variable costing in year 2015?arrow_forwardneed solution for this questionsarrow_forwardcalculate the ROIarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





