The Japanese cost-management system involves
A) designing a product and then determining the cost of producing it.
B) a new system of accounting for capital depreciation.
C) determining how much a product should cost and then determining how much should be produced.
D) minimizing international transportation costs.

Question

Quizplus · Accepted Answer

The Japanese cost-management system, often associated with target costing, involves determining the target cost of a product (how much it should cost) first, based on market conditions and customer expectations, and then working backwards to figure out how to produce it at that cost. This approach contrasts with traditional cost-plus pricing, where a product is designed first and then the cost of producing it is determined.

The Japanese Cost-Management System Involves