The target cost for a job using job costing is calculated as
A)direct costs + desired profit.
B)direct costs - desired profit.
C)expected selling price - direct costs.
D)expected selling price - desired profit.
E)expected selling price + desired profit.

Question

Quizplus · Accepted Answer

The target cost for a job using job costing is the expected selling price for the job minus the desired profit. This is because the target cost is the maximum amount that can be spent on direct costs while still achieving the desired profit. So, the formula for target cost is: expected selling price - desired profit.

The Target Cost for a Job Using Job Costing Is