When the Firm Uses the Target-Costing Approach to Pricing, the Target

question 178

Multiple Choice

When the firm uses the target-costing approach to pricing, the target cost per unit is the difference between the per unit target price and the per unit target ________.

• A) contribution margin
• B) operating income
• C) cost of goods sold
• D) gross margin

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Definitions:

Transferee

A person or entity that receives property, rights, or a legal interest from another (the transferor) through a legal transfer process.

Transferor

An individual or entity that transfers property, rights, or interest to another.

Instrument

A formal document, especially one used in legal or financial contexts, that records a contractual agreement, obligation, or right.

Enforce

To compel obedience or compliance, often through legal or authoritative action.