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:

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate at which your last dollar of income is taxed.

Taxable Income

Taxable income is the amount of an individual's or business's income used to calculate how much tax they owe to the government in a given tax year, after all deductions and exemptions.

Tax Cutters

Advocates or policies aimed at reducing the level of taxation.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits to qualifying individuals.