A Target Return Profit Objective Implies That a Company Chooses

question 10

Multiple Choice

A target return profit objective implies that a company chooses to

• A)set targets whose performance can be measured quickly.
• B)give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
• C)set a profit goal that is often determined by its board of directors.
• D)reduce investment in any further market or product research.
• E)set prices based on return on sales.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to individual products based on a common activity base.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Manufacturing Cost

The total expense incurred in the process of producing goods, including materials, labor, and overhead.

Selling Prices

The amount of money charged for a product or service, determined by cost, competition, and market demand.