The target price is subtracted from per unit target operating income to calculate __________?
Correct answer: D. target cost per unit
- A. total current full cost
- B. total cost per unit
- C. target operating income per unit
- D. target cost per unit
Explanation
The target-cost formula is target price minus target operating income per unit. The remainder is the maximum allowable, or target, cost per unit.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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