Target Costs Equal Which of the Following

question 128

Multiple Choice

Target costs equal which of the following?

• A)target prices minus target profits.
• B)fixed costs plus variable costs.
• C)prime costs plus conversion costs.
• D)opportunity cost plus cost of capital.

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Definitions:

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are deducted.

Gross Profit

The income a business earns after subtracting the expenses involved in producing and selling its goods or delivering its services.

FOB Shipping Point

A term indicating that the buyer assumes responsibility for the goods once they are shipped by the seller; the buyer pays for shipping costs.

Physical Count

A method of inventory verification where actual items are counted to match the inventory records.