When the Firm Uses the Target-Costing Approach to Pricing, the Target

question 178

Multiple Choice

When the firm uses the target-costing approach to pricing, the target cost per unit is the difference between the per unit target price and the per unit target ________.

• A) contribution margin
• B) operating income
• C) cost of goods sold
• D) gross margin

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Definitions:

Utility

In economics, a measure of satisfaction or happiness that individuals get from consuming goods and services.

Time Utility

The value added to products or services by making them available at the right time to meet consumer needs.

Multitouch

A technology that enables a surface (such as a touchscreen) to recognize the presence of more than one point of contact with the surface simultaneously.

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its visible, tangible assets; often related to the brand reputation, customer loyalty, and other factors not directly quantifiable.