The Formula for Target Cost Is

question 4

Multiple Choice

The formula for target cost is:

• A)Target cost = Anticipated selling price - Desired profit.
• B)Target cost = Unit cost + (Markup percentage × Unit cost)
• C)Target cost = Units sold × Unit cost traceable to product
• D)Target cost = (Desired return on assets employed + Selling and administrative expenses) ÷ (Units sold × Unit product cost)

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Definitions:

Lower Control Limit

A statistic used in process control that represents the lowest acceptable boundary for process variation.

ISO 9001:2015

An international standard that specifies requirements for a quality management system (QMS).

Quality System

A structured framework for managing and improving all aspects of an organization's operations, ensuring consistency, efficiency, and satisfaction.

Customer Expectations

The set of assumptions, desires, and needs that a customer has regarding a product or service.