The product strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide an adequate profit margin is referred to as ________.
A)full costing
B)target costing
C)predatory pricing
D)absorption costing

Question

Quizplus · Accepted Answer

This is the definition of target costing, where the price is determined first and then the product is designed to match that price point while still achieving a desired profit margin. Full costing and absorption costing refer to methods of determining product costs, while predatory pricing is a pricing strategy in which a company sets a low price to drive competitors out of the market.

The Product Strategy in Which Companies First Determine the Price