Target Costing Involves Determining What the Product Price Must Be

question 4

True/False

Target costing involves determining what the product price must be in order to meet the target cost and still provide a profit for the company's shareholders.

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Definitions:

Cash-Basis Accounting

An accounting method where revenues and expenses are recorded only when cash is received or paid, irrespective of when the transactions occurred.

General Journal

A primary accounting record used to record all types of accounting transactions including both debits and credits.

Ledger

A book or collection of financial accounts.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts in order to verify that debits equal credits.