Which of the Following Steps Occurs First in a Target

question 107

Multiple Choice

Which of the following steps occurs first in a target costing design cycle?

• A) Make product design choices to achieve the target cost.
• B) Determine the target cost.
• C) Evaluate feasibility using a pilot project.
• D) Determine product target price, quality, and functionality.

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Definitions:

Profits

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operation.

Economic Rents

Earnings in excess of the minimum amount required to keep a resource in its current use, often due to scarcity or monopolistic control.

Accrue

The accumulation or increase of something over time, especially payments or benefits.

Changes in Rent

Variations in the lease price for rental properties due to factors like market demand, location, and quality of the property.