In target costing,the target cost should be determined:
A)before manufacturing ever starts.
B)after initial manufacturing prototypes are created.
C)after customers provide feedback about critical features.
D)before goods are shipped to customers,but after manufacturing begins.

Question

Quizplus · Accepted Answer

In target costing, the target cost should be determined before manufacturing ever starts. This is because the target cost sets the maximum cost that a product can be produced for while still being profitable, which then drives decisions about the design, materials, and manufacturing processes used to create the product. If the target cost is not established prior to manufacturing, there is a greater risk of overruns or inefficiencies that can make the product unprofitable.

In Target Costing,the Target Cost Should Be Determined