Which of the Following Statements Is NOT Consistent with Target

question 62

Multiple Choice

Which of the following statements is NOT consistent with target costing?

• A) The target cost is the anticipated selling price less the desired profit.
• B) The technique is most useful in the manufacturing stage of a product.
• C) Effective target costing is an integral part of continuous improvement (Kaizen costing) as a management philosophy.
• D) In target costing, the anticipated selling price of a product determines the maximum allowable cost for the product.

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Definitions:

Price Inelastic

A description of a good or service's demand when its quantity demanded is relatively insensitive to changes in its price.

Baseball Cards

Collectible items featuring baseball players, teams, or events, traditionally traded and valued by enthusiasts.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified period of time.

Perishable Crop

Agricultural products that have a short shelf life and can spoil or decay quickly, requiring timely sale and consumption.