Data for a Factory -
Target Costing Is a Management Accounting Technique with the

question 18

Multiple Choice

Data for a factory
$\begin{array}{ll}\text { Total factory cost } & £ 10,000 \\\text { Total time au ailable on key resource (hours) } & 2,500 \\\text { Contribution per unit product A } & £ 34.00 \\\text { Contribution per unit product B } & £ 30.00 \\\text { Contribution per unit product C } & £ 22.00 \\\text { Contribution per unit product D } & £ 20.00 \\\text { Hours required product A } & 12.0 \\\text { Hours required product B } & 6.0 \\\text { Hours required product C } & 6.0 \\\text { Hours required product D } & 8.0\end{array}$

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Target costing is a management accounting technique with the following important supply chain implications:

• A)Progressive cost cuts are required from suppliers
• B)External sourcing influenced by cost and design specifications set by the market
• C)Sharing of cost and output data enables benefits of partnership sourcing
• D)Competition between supply chains rather than individual firms

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Definitions:

Extinction

The discouraging of behaviour by making the removal of a desirable consequence contingent on its occurrence.

Disruptive Behaviours

Actions that interrupt the normal flow or operations within a group, often negatively affecting the environment or outcomes.

Co-workers

Individuals who work together typically in the same department or project within an organization.

Diminishing Marginal Product

The principle that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit of input will eventually decrease.