Target Costing Means to Price Based on Demand

question 16

True/False

Target costing means to price based on demand.A product is designed so it satisfies needs and meets the profit margins desired by the company.

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Definitions:

Debentures

A type of debt instrument that is not secured by physical assets or collateral but backed only by the general creditworthiness and reputation of the issuer.

Interest Expense

The cost incurred by an entity for borrowed funds, often quoted as an annual rate, and is typically deductible for tax purposes.

Sinking Fund

A reserve fund established by a company to repay debt or replace a preferred stock at a future date through periodic payments.

Bond Indenture

A legal contract between the bond issuer and the bondholders detailing the terms of the bond, including interest rate, maturity date, and other conditions.