Target Costing Is a Cost-Based Pricing Strategy

question 150

True/False

Target costing is a cost-based pricing strategy.

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Definitions:

Perpetual Inventory System

Inventory accounting method where transactions are instantly recorded via computerized point-of-sale systems and enterprise asset management software.

Merchandise

Goods bought and sold by businesses in the course of their trade; often refers specifically to products sold by retail businesses.

Discount Period

The discount period is the time frame during which a payment can be made with a discount for early payment according to the terms of a sales agreement.

Operating Expenses

Costs associated with running a business’s core operations on a daily basis, such as rent, utilities, and payroll, excluding the cost of goods sold.