Target costing reverses the procedure used by cost-based pricing methods.

Name: Target costing reverses the procedure used by cost-based pricing methods.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Target costing is a pricing method where the company determines the selling price of the product first, and then works backward to set a target cost that ensures a desired profit margin. This is the opposite of cost-based pricing methods where the cost of the product is determined first and then a markup is added to set the selling price.

Target Costing Reverses the Procedure Used by Cost-Based Pricing Methods