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Re: traget costs calculation in repetitive manufacturing

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Hi Arturo,

Thank you for answering. I checked everything you mentioned, I tested all possible cases, and I finally figured out what was going on: for overhead, in target cost calculation, the formula is not Value from standard cost*delivered quantity but it applies the calculation from costing sheet to the new calculated standard costs (example: target cost for activity confirmation is A (value from standard cost structure*delivered quantity)  and I have an overhead that calculates15% to activity confirmation=15%*A/100.

From this calculation comes out some rounding and when we are considering quantity like a few thousands on a month the value is relevant.

Do you know if there is another way of calculating target costs (I know about preliminary cost estimate, but is not suitable  for my client?

How can I possible change the current situation?

Best regards,

Lavinia


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