Target Costing Starts with The

question 6

Multiple Choice

Target costing starts with the:

• A)price the supplier wants to charge for goods or services.
• B)price the buyer wants to pay for a good or service.
• C)cost of materials to make an end product.
• D)price of a final product or service.
• E)total cost of doing business with a supplier.

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Definitions:

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company’s balance sheet.

Asset Account

An account on a balance sheet that represents a resource owned or controlled by a company, expected to produce future economic benefits.

Acquisition Cost

The total expense incurred to obtain an asset, including the purchase price and all related costs to ready the asset for its intended use.

Installation Costs

Expenses incurred during the setup of equipment, machinery, or systems.