Asked by Kaitlyn Munger on May 29, 2024
Verified
The following four tasks take place in the concept known as target costing.
i. Value engineering
ii. Establish a target price
iii. Establish a target cost
iv. Establish a target profit
Which of the following correctly depicts the sequence of these tasks?
A) iii, i, iv and ii
B) ii, iv, iii and i
C) ii, iii, i and iv
D) iii, ii, i and iv
Target Costing
A pricing strategy in which the selling price of a product is determined first, and then the manufacturing cost is managed to meet the desired profit margin.
Value Engineering
A systematic method to improve the "value" of goods or products and services by using an examination of function.
Target Price
The price at which an investor aims to buy or sell a stock based on future price predictions.
- Gain insight into the approach for setting target prices and costs to satisfy market needs.
Verified Answer
SR
skylar robinsonJun 02, 2024
Final Answer :
B
Explanation :
The correct sequence for target costing starts with establishing a target price (what the market will pay), then determining a target profit (desired profit), followed by establishing a target cost (target price minus target profit), and finally, value engineering is applied to achieve the target cost.
Learning Objectives
- Gain insight into the approach for setting target prices and costs to satisfy market needs.