Question

In target costing???

A)the target cost is established first, then the target price

B)the target cost is estimated long run cost that enables a product to achive a desired
profit

C)The focus of target costing is to undercut the completion

D)target costs are generally higher then current cost​

Answer 1

Explanation:

Target costing is not just a method of costing, but rather a management technique wherein prices are determined by market conditions, taking into account several factors, such as homogeneous products, level of competition, no/low switching costs for the end customer, etc. When these factors come into the picture, management wants to control the costs, as they have little or no control over the selling price.

CIMA defines target cost as “a product cost estimate derived from a competitive market price.”