If the Target Cost Is Less Than What Is Currently

question 62

Essay

If the target cost is less than what is currently achievable,management must find ways to reduce costs in order to attain the target cost.Describe the three cost reduction methods that are typically used.

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Definitions:

Corporation

A business organization that is a separate legal entity from its owners, the shareholders.

Tax Advantages

Financial benefits that arise from the application of tax laws, such as deductions or credits, which reduce tax liability.

Shareholders

Individuals or entities that legally own one or more shares of stock in a public or private corporation.

Incorporation

Incorporation is the process of legally forming a corporation or company, which is then recognized as a separate legal entity from its owners.