Target Costing Adds a Profit Margin to Estimated Cost of Production

question 345

True/False

Target costing adds a profit margin to estimated cost of production to determine the optimal price.

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Definitions:

Snowblowers

Machines designed for removing snow from surfaces, such as driveways and sidewalks, using a rotating auger to collect and eject the snow to the side.

Inventory Turnover

A metric that reveals the number of times a company's inventory is sold and restocked within a certain period.

Days in Inventory

A financial metric that indicates the average number of days a company takes to sell its entire inventory.

Ending Inventory

The amount of inventory available to be sold by the end of an accounting term.