A Difference in Cost-Plus Pricing and Target Costing Is That

question 53

Multiple Choice

A difference in cost-plus pricing and target costing is that

• A)Target costing is generally determined after introducing a product and cost-plus pricing is determined before introducing a product.
• B)Target costing is a simple approach while cost-plus pricing is relatively complex.
• C)Target costing starts with the price customers are willing to pay whereas cost-plus pricing starts with the cost.
• D)Target costing computes the desired markup while cost-plus pricing computes the maximum cost the company is willing to incur.