To design costs out of products is a goal of:
A)target costing.
B)cost-plus pricing.
C)Kaizen costing.
D)peak-load costing.

Question

Quizplus · Accepted Answer

Target costing is a process where costs are designed out of products in order to meet a specific target price that is set based on the price that the market is willing to pay. This involves a cross-functional team working together to identify the costs that can be reduced or eliminated in order to meet the target price. Therefore, designing costs out of products is a goal of target costing. Cost-plus pricing is a pricing strategy where a markup is added to the cost of a product to determine the selling price. Kaizen costing is a continuous improvement process where costs are gradually reduced over time. Peak-load costing is a method of cost calculation that considers the peak production levels of a business.

To Design Costs Out of Products Is a Goal Of