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UT Knoxville ACCT 200 - Chapter 12 continued
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ACCT 200 1st Edition Lecture 27 Outline of Last Lecture I. Cost Plus PricingII. Market Based PricingOutline of Current Lecture I. MarkupII. Target CostIII. Homework 12-15IV. Homework 12-18Current LectureI. Markupa. Markup percentage = total profit / total costb. Markup = profitII. Target Costa. Target cost = preset price – desired profitb. You must control cost to make a profitc. Desired profit = investment x return of investmentIII. 12-15a. 1080000b. 168.75c. 1080000/13500000 = 8%d. 168.75 x .08 = 13.5These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.168.75 + 13.5 = 182.25IV. 12-18a. price will be set at market price (24000)b. profit = 24000 x .2 = 480024000-TC = 4800TC = 19200They cannot receive a 20% profit with their current estimates. They would need to cut costs in some way to keep the price at


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