____ is the process of determining what the external customer is willing to pay for a product or service and then assigning specific cost targets to the components,assemblies,and systems that make up the product or service.
A) Specific costing
B) Target pricing
C) Total cost analysis
D) Cost avoidance
E) None of these choices.

Question

Quizplus · Accepted Answer

This process is called target pricing. It involves determining the price that customers are willing to pay for a product or service and then working backwards to determine the specific cost targets for each component or system of the product. This approach helps companies ensure that their products are priced competitively while also ensuring that they can make a profit. Option A (specific costing) refers to a method of allocating costs to specific products or services, while option C (total cost analysis) involves analyzing all the costs associated with a product or service. Option D (cost avoidance) refers to strategies for reducing costs in order to increase profits.

____ Is the Process of Determining What the External Customer