What is the definition of target costing?
A)Target costing is a method of determining the cost of a product or service based on the price that customers are willing to pay.
B)The cost is calculated by subtracting the desired profit from the target price.
C)Target costing is an interactive process.
D)Target costing is cost driven.

Question

Quizplus · Accepted Answer

Target costing is a method of determining the cost of a product or service based on the price that customers are willing to pay. The cost is then optimized to meet that target price, while still providing a desired profit margin. This approach places a greater emphasis on customer value and market pricing, rather than focusing solely on internal cost considerations.

What Is the Definition of Target Costing