When a company establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin, it is known as target costing.

Name: When a company establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin, it is known as target costing.
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Question

Quizplus · Accepted Answer

When firms set prices by adding a desired profit margin to production costs, they are using a pricing approach known as cost-based pricing.

When a Company Establishes the Price It Charges for Its