The target costing method enables a company to establish an initial price, set a profit margin, and control costs to ensure that the required profit margin is met.

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The statement is true, as the target costing method involves determining the maximum price that customers will pay for a product, setting a target profit margin, and then working backwards to determine the maximum cost that can be incurred in producing the product while still achieving the desired profit margin. By controlling costs to stay within the allowed cost limit, the company ensures that the target profit margin is met.

The Target Costing Method Enables a Company to Establish an Initial