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.

---

Definitions:

Dividend Payout Ratio

The ratio of the total dividends declared by a company to its net income, showing what portion of earnings is paid out as dividends.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Current Ratio

An indicator of how well a company can satisfy its obligations due within a short period, calculated by taking current assets and dividing them by current liabilities.

Acid-Test Ratio

Acid-test ratio is a financial metric used to determine a company's short-term liquidity position by comparing its most liquid assets to its current liabilities.