When a Firm Determines the Desired Cost for a Product

question 82

Multiple Choice

When a firm determines the desired cost for a product or service, given a competitive market price, in order to earn a desired profit, the firm is exercising:

• A) Target costing.
• B) Life cycle costing.
• C) Variable costing.
• D) Absorption costing.
• E) Competitive costing.

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Definitions:

Multinational Firm

A business which functions across various nations, overseeing the manufacturing or provision of services beyond its original country.

World Trade Organization (WTO)

A permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

Economic Flows

Economic flows refer to the movement of goods, services, money, and resources among individuals, businesses, and nations, comprising the economic activities of a global economy.

World Trade

The exchange of goods and services and capital across international borders, which allows for economies to grow and standards of living to increase.