The five tasks that follow take place with the concept known as target costing:

● Use value engineering to identify ways to reduce product cost.
● Determine the market price.
● Determine the desired profit.
● Use kaizen costing and operational control to reduce costs.
● Calculate the target cost at market price less desired profit.

Which of the following choices depicts the correct sequence of these tasks?
A) 1, 2, 3, 4, 5
B) 2, 3, 5, 1, 4
C) 3, 2, 5, 4, 1
D) 3, 2, 5, 1, 4
E) 5, 3, 2, 4, 1

Question

The five tasks that follow take place with the concept known as target costing:

●	Use value engineering to identify ways to reduce product cost. 
●	Determine the market price. 
●	Determine the desired profit. 
●	Use kaizen costing and operational control to reduce costs. 
●	Calculate the target cost at market price less desired profit.

Which of the following choices depicts the correct sequence of these tasks?
A) 1, 2, 3, 4, 5
B) 2, 3, 5, 1, 4
C) 3, 2, 5, 4, 1
D) 3, 2, 5, 1, 4
E) 5, 3, 2, 4, 1

Quizplus · Accepted Answer

The correct sequence for target costing starts with determining the market price, then the desired profit, calculating the target cost (market price less desired profit), and finally using value engineering and kaizen costing to reduce costs to meet the target cost.

The Five Tasks That Follow Take Place with the Concept