Matton Corporation manufactures a single product that has a cost of $350. The company uses a 70% markup on cost to arrive at a selling price of $595, which results in a price that virtually always exceeds that of the market leaders. If Matton changes to the approach known as target costing, the company will first undertake a thorough study of competitors' prices.

Question

Quizplus · Accepted Answer

Target costing involves setting a target cost by subtracting a desired profit margin from a competitive market price, which necessitates understanding competitors' pricing strategies.

Matton Corporation Manufactures a Single Product That Has a Cost