Target return pricing is a variation of average-cost pricing--and has the same basic weakness as other average-cost methods.

Question

Quizplus · Accepted Answer

Target return pricing, like other average-cost methods, assumes that costs are linear and can be allocated evenly across all units produced. However, this may not accurately reflect the true costs of producing each unit, leading to potentially misleading pricing decisions.

Target Return Pricing Is a Variation of Average-Cost Pricing--And Has