Target Costing Refers To

question 30

Multiple Choice

Target costing refers to:

• A)an incentive system for employees.
• B)the design of a product alone.
• C)the profit from a product and the processes used to produce it.
• D)the design of a product and the processes used to produce it to enable the firm to make a profit when products are sold.
• E)kaizen costing.

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Definitions:

Direct Labour Rate

The wage rate paid to employees directly involved in manufacturing goods or providing services, excluding indirect costs such as benefits and overtime.

Process Costing

A costing method used where production is continuous, and the costs are allocated over units of output equally, making it suitable for industries like manufacturing and chemicals.

Hybrid Costing

A costing method that combines elements of both job costing and process costing, typically used in manufacturing products that have some common characteristics and some unique features.

Upstream Costs

Expenses incurred in the preliminary stages of the product development cycle, such as research and development or raw material extraction.