Caldwell Company desires to enter a market with a new product. As part of this process the following tasks will be performed:

● Determine a desired profit margin.
● Use Kaizen costing.
● Design and engineer the product.
● Determine the product's cost.
● Determine the suggested selling price.

Which task would Caldwell Company perform first if it plans to use target costing?
A) Determine a desired profit margin.
B) Use Kaizen costing.
C) Design and engineer the product.
D) Determine the product's cost.
E) Determine the suggested selling price.

Question

Caldwell Company desires to enter a market with a new product. As part of this process the following tasks will be performed:

●	Determine a desired profit margin. 
●	Use Kaizen costing. 
●	Design and engineer the product. 
●	Determine the product's cost. 
●	Determine the suggested selling price.

Which task would Caldwell Company perform first if it plans to use target costing?
A) Determine a desired profit margin.
B) Use Kaizen costing.
C) Design and engineer the product.
D) Determine the product's cost.
E) Determine the suggested selling price.

Quizplus · Accepted Answer

Target costing begins with determining the suggested selling price to ensure the product can be competitively priced in the market.

Caldwell Company Desires to Enter a Market with a New