When Target Costing and Target Pricing Are Used Together ________

question 70

Multiple Choice

When target costing and target pricing are used together ________.

• A) the target cost is established first, then the target price
• B) the target cost is the estimated long-run cost that enables a product or service to achieve a desired profit
• C) the focus of target pricing is to undercut the competition
• D) target costs are generally higher than current costs

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Definitions:

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) at regular intervals until the maturity date, when the principal amount is repaid.

Market Yield

The current return on investment for a security, factoring in its price variations and dividend payments.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or currency note.

Real Rate Of Return

The yearly percent yield earned from an investment, after accounting for variations in price caused by inflation or various external influences.