Question

Target costing is: A. a method of cost planning to reduce only manufacturing costs to targeted levels. B. the process of examining each component of a product to determine whether its cost can be reduced. C. the process of managing R&D and design costs. D. a system that focuses on reducing costs during the manufacturing cycle.

Answer 1

Answer:D. A system that focuses on reducing costs during the manufacturing cycle.

Explanation: Target costing is a systematic approach aimed at managing a product's cost through its life cycle,it is started during the product development and design phases putting into consideration the profit margins and the expected functionality of the product and ensures that the product survives and generates profit during harsh competition,it was started by Japanese to make their products more profitable and competitive when compared with those of the west( United States of America and Europe).