In contrast to the total product and variable cost concepts used in setting seller's prices,the target cost approach assumes that
A)a markup is added to total cost.
B)selling price is set by the marketplace.
C)a markup is added to variable cost.
D)a markup is added to product cost.

Question

Quizplus · Accepted Answer

The target cost approach assumes that the selling price is determined by the market, and the company works backward to ensure that production costs allow for profitability at that price.

In Contrast to the Total Product and Variable Cost Concepts