The first step in the target costing for target pricing approach is
A) calculating a target cost per unit.
B) using the prevailing market price per unit as a price ceiling.
C) computing the budgeted profit per unit.
D) determining the total cost per unit.

Question

Quizplus · Accepted Answer

The first step in target costing is to use the prevailing market price per unit as a price ceiling to determine the maximum allowable cost to achieve desired profitability.

The First Step in the Target Costing for Target Pricing