List the Three Product Characteristics That a Target Costing Design

question 33

Essay

List the three product characteristics that a target costing design team would choose to enhance or minimize as they make trade-offs to achieve the target cost. Describe two of the types of trade-offs they may consider.

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Definitions:

Realizable Value

The estimated amount that an entity can receive from the disposal of an asset, after deducting the costs associated with the disposal.

Maturity Value

Maturity value is the amount to be received by an investor at the maturity date of a financial instrument, often including principal and interest.

Allowance Method

A bookkeeping approach involving the estimation of non-recoverable debts by anticipating uncollectible accounts at the close of every period.

Uncollectible Receivables

Accounts receivable that cannot be collected from customers, often written off as a bad debt expense.