All of the following are associated with target costing EXCEPT:
A)value engineering
B)the markup component
C)all value-chain business functions
D)cross-functional teams

Question

Quizplus · Accepted Answer

Target costing involves determining a target cost for a product based on customer demand and then working backward to determine the allowable cost for each component or process. The markup component is not relevant to target costing as it focuses on cost reduction rather than pricing decisions. A, C, and D are all associated with target costing as value engineering, all value-chain business functions, and cross-functional teams are all used to achieve cost reduction and meet the target cost.

All of the Following Are Associated with Target Costing EXCEPT