Radox, a luxury watch brand, identifies a market segment that is willing to pay premium prices for its watches, and Radox managers select an ideal selling price. Managers then determine the costs to create watches that meet the ideal selling price. The company's pricing approach is referred to as .
A) target costing
B) value-added pricing
C) target return pricing
D) cost-plus pricing
E) mass production

Question

Quizplus · Accepted Answer

Target costing is a pricing approach where the company identifies the ideal selling price first and then determines the costs that can be incurred to meet that price, which is what Radox is doing.

Radox, a Luxury Watch Brand, Identifies a Market Segment That