Target Costing Starts With

question 6

Multiple Choice

Target costing starts with:

• A)the selling price of an organization's end product minus the operating profit to establish the target cost.
• B)the supplier's price,and works to determine the selling price of the buying organization's end product or service.
• C)the supplier's price,and works to determine the supplier's true cost structure.
• D)the buyer's lowest reasonable price target,and works to a negotiated price agreed on by the buyer and the supplier.
• E)the selling price of an organization's end product minus actual manufacturing,overhead,and materials costs to determine operating profit.

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Definitions:

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response behavior.

Paired

Describes objects or concepts that are linked or associated with each other in some relationship or function.

Conditioned Stimulus

A formerly neutral signal that, when linked with the unconditioned stimulus, ultimately elicits a conditioned reaction.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior learning or conditioning.