The Revenue Effect of Price Recovery Is Calculated by Multiplying

question 123

Multiple Choice

The revenue effect of price recovery is calculated by multiplying the difference in selling price (current year minus the previous year) by ________.

• A) actual units sold in the current year
• B) budgeted units sold in the previous year
• C) budgeted units sold in the current year
• D) actual units sold in the previous year

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Definitions:

Target Profit

The specific net income a business intends to reach within a designated timeframe.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Target Costing

A pricing method that involves determining a product's selling price and then subtracting desired profit to arrive at a target production cost.

Target Costing

A pricing strategy where the selling price of a product is determined first, and then the manufacturing cost is managed to meet that target price.