Target costing focuses on which of the following phases of production because it has the highest opportunity for cost savings:
A) Production
B) Quality control
C) Design
D) Research and development

Question

Quizplus · Accepted Answer

Target costing is a cost management strategy used during the design phase of production. It involves setting a target cost for a product based on the desired profit margin and market conditions, and then working backwards to identify ways to reduce costs in the design of the product. This phase therefore provides the highest opportunity for cost savings, as changes made during later phases (such as production or quality control) are typically more costly and time-consuming to implement.

Target Costing Focuses on Which of the Following Phases of Production