Economics · Cost Accounting
Which of the following best describes target costing?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A method of costing whose target is to reduce unit cost without impairing value to the customer
- 2A method of costing that targets selected business departments and aims to minimise their costs
- 3A method of costing that sets a target price by adding a desired profit margin to actual cost
- 4A method of costing that sets a target cost by subtracting a desired profit margin from a competitive market price✓
Correct answer
A method of costing that sets a target cost by subtracting a desired profit margin from a competitive market price
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