Management Accounting Information Helps Managers Calculate a Target Cost for a Product

question 49

Multiple Choice

Management accounting information helps managers calculate a target cost for a product ________.

• A) by subtracting from the target price the operating income per unit of product that the company wants to earn
• B) by subtracting from the target price the net income per unit of product that the company wants to earn
• C) by subtracting profit margin per unit from the target price of product that the company wants to earn
• D) by adding the operating income per unit and the contribution margin per unit

---

Definitions:

Mortgage Note

A legal document that obligates a borrower to repay a loan used to purchase a property, outlining the terms of the loan, interest rate, repayment schedule, and enforcement rights.

Installment Payments

Payments made regularly over time to settle a debt or purchase, dividing the total cost into smaller amounts.

Principal Balance

The outstanding amount of a loan or mortgage that remains to be paid, excluding interest.

Mortgage Note Payable

A liability in the form of a written promise to repay a specified amount of money, along with interest, secured by a mortgage on property.