Target Costing Is Arrived at by Taking

question 54

Multiple Choice

Target costing is arrived at by taking

• A) the selling price minus desired profit
• B) the selling price and adding desired profit
• C) the selling price and subtracting the budget standard cost
• D) the budget standard cost and reducing it by 10%

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed.

Lump-Sum Tax Rate

A tax that is a fixed amount, no matter the change in circumstance of the taxed entity. This creates a situation where the tax burden falls more heavily on those with lower income or profit.

Marginal Tax Rate

The amount of tax applied to an additional dollar of income, often used in progressive tax systems.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressing the percentage of income that is paid in taxes.