General Studies · Learning Curve and Target Costing
The direct labour cost per unit was originally based on an expected learning rate of 90%, but now a 95% learning rate needs to be applied instead. Which of the following statements is true regarding the impact on target cost and cost gap?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The target cost will remain the same and the cost gap will decrease
- 2The target cost will remain the same and the cost gap will increase✓
- 3The target cost will increase and the cost gap will decrease
- 4The target cost will decrease and the cost gap will increase
Correct answer
The target cost will remain the same and the cost gap will increase
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