Target pricing:
A) starts with the supplier's price, and works to determine the selling price of the buying organization's end product or service.
B) starts with the selling price of an organization's end product minus the operating profit to establish the target cost.
C) starts with the selling price of an organization's end product minus actual manufacturing, overhead, and materials costs to determine operating profit.
D) starts with the supplier's price, and works to determine the supplier's true cost structure.
E) starts with the buyer's lowest reasonable price target, and works to a negotiated price agreed on by the buyer and the supplier.

Question

Quizplus · Accepted Answer

Target pricing involves setting a target cost by subtracting the desired profit margin from the competitive market price of the end product.

Target Pricing