If a company that has opted to use target costing for target pricing computes a unit production cost that exceeds the target unit cost, then the company should
A) not manufacture and sell the product.
B) use lower quality materials which cost less to make the product.
C) perform cost analysis and value engineering to achieve a target unit cost.
D) increase the unit selling price so that the unit target cost will increase.

Question

Quizplus · Accepted Answer

The Answer of If a company that has opted to use target costing for target pricing computes a unit production cost that exceeds the target unit cost, then the company should
A) not manufacture and sell the product.
B) use lower quality materials which cost less to make the product.
C) perform cost analysis and value engineering to achieve a target unit cost.
D) increase the unit selling price so that the unit target cost will increase.

If a Company That Has Opted to Use Target Costing