Target Cost Is Comprised of

question 107

Multiple Choice

Target cost is comprised of

• A) variable and fixed manufacturing costs only.
• B) variable manufacturing and selling and administrative costs only.
• C) total manufacturing and selling and administrative costs.
• D) fixed manufacturing and selling and administrative costs only.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but retained for reinvestment in the business or to pay off debt.

Ending Balance

The final amount in an account at the end of a period, after all debits and credits have been accounted for.

FOH Volume Variance

A financial metric that measures the difference between the budgeted fixed overhead and the applied fixed overhead based on actual production volumes.

FOH Budget Variance

The difference between the budgeted factory overhead costs and the actual factory overhead incurred during a period.