Place the following steps for the implementation of target costing in order:
A = Derive a target cost
B = Develop a target price
C = Perform value engineering
D = Determine target operating income
A) B D A C
B) B A D C
C) A D B C
D) A B C D

Question

Quizplus · Accepted Answer

To implement target costing, the first step is to develop a target price (B). From there, the target operating income (D) can be determined. Once the target operating income is known, the target cost (A) can be derived. Finally, value engineering (C) can be performed to identify ways to achieve the target cost. Therefore, the correct order is B, A, D, C, making choice B the best option.

Place the Following Steps for the Implementation of Target Costing