Target Costing.

1.

2.

3.

4.

5.

Cost-Plus Pricing.

1.

2.

3.

4. The cost-plus pricing formula is expressed as follows:

___________________________________________________________

5.

6. The lower the sales volume, the higher the selling price the company must charge to meet its desired ROI. This occurs because _________________

___________________________________________________________

Time-and-Material Pricing.

1. Under time-and-material pricing, the company sets two pricing rates

2. 2. .

2. Using time-and-material pricing involves three steps:

a.

b.

c.

4. The charge for labor time is expressed as a rate per labor hour which includes:

a.

b.

c.

5. The charge for materials typically includes a material loading charge which covers the costs of:

6. The material loading charge is expressed as a percentage of the total estimated costs of parts and materials for the year. The company determines this percentage by doing the following:

a.

b.

c.

7. The charges for any particular job are the sum of the

a.

b.

c.