Full Cost Plus Some Target Margin Are Used to Set

question 25

Multiple Choice

Full cost plus some target margin are used to set price in a:

• A)customer-driven firm.
• B)nonmarket-driven firm.
• C)market-driven firm.
• D)share-driven firm.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a produced unit.

Unit Product Cost

The total cost, including materials, labor, and overhead, divided by the number of units produced.

Year 2

Refers to the second year of a time-related context or sequence, not a standalone key term without additional context.

Contribution Margin

The amount of revenue remaining after subtracting variable costs, indicating how much contributes towards covering fixed costs and generating profit.