Which statement is true concerning target costing?
A)Target costing is setting price below costs in the short run to drive out competitors.
B)Target costing is the systematic evaluation of all costs relevant to a decision.
C)Target costing is the concept of price-based costing.
D)None of the answers is correct.

Question

Quizplus · Accepted Answer

Target costing is indeed the concept of price-based costing, where a company determines the potential selling price of a product first and then subtracts a desired profit margin to arrive at a target cost. This approach is used to ensure that a product can be produced at a cost that allows the company to be competitive in the market while still achieving desired profit levels.

Which Statement Is True Concerning Target Costing