Which of the Following Is NOT One of the Steps

question 2

Multiple Choice

Which of the following is NOT one of the steps to move from a line-item budget system to a functional or program budgeting system.

• A) Selecting the program's intermediate output measure
• B) Computing the program's cost per intermediate output
• C) Determining the intermediate cost per client's per day of attendance
• D) Determining the program's final output objective

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Definitions:

Target Costing

A pricing approach where a company determines the potential selling price of a product and then subtracts desired profit to arrive at a target cost, subsequently focusing on reducing manufacturing costs to meet this target.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit gained from an investment by the cost of the investment.

Selling Price

The amount a customer pays to purchase a product or service, determined by various factors including cost, competition, and demand.

Target Costing

A pricing method that starts with a market-based price point and then deduces the allowable cost to maintain profitability.