Target costing is most effective at reducing costs during the product design phase.

Question

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Target costing involves setting a desired cost for a product and working backward from that cost to determine the necessary features, specifications, and production processes. This is most effectively done during the product design phase when decisions about these factors are still being made. By identifying cost savings opportunities early on, target costing can help reduce costs throughout the product lifecycle.

Target Costing Is Most Effective at Reducing Costs During the Product