Target costing is arrived at by taking the
A) selling price minus desired profit
B) selling price and adding desired profit
C) selling price and subtracting the budget standard cost
D) budget standard cost and reducing it by 10%

Question

Quizplus · Accepted Answer

Target costing involves determining the maximum cost that can be incurred for a product in order to achieve a desired profit margin, based on the selling price. Therefore, the starting point is the selling price, and the desired profit is then subtracted from it in order to arrive at the target cost.

Target Costing Is Arrived at by Taking the