Which of the following statements regarding the difference in target costing and

Question

Which of the following statements regarding the difference in target costing and cost-plus pricing is TRUE.

   A. Target costing starts with the target cost and then determines the target selling price.

   B. Target costing starts with the expected market selling price and then "back in" to the target cost.

   C. Cost plus pricing starts with the expected market selling price and "back in" to the target cost.

   D. Cost plus pricing starts with the target cost and adds a mark-up to get to the actual sales price.

Explanation / Answer

B. Target costing starts with the expected market selling price and then "back in" to the target cost. Working: Target Cost = Anticipated Selling Price - Desired Profit The target costing for a product is calculated by starting with the product's anticipated selling price and then deducting the desired profit. Thank you.... Thank you....

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