Question

Relevant costs for target costing include:

A. variable manufacturing costs.
B. variable manufacturing and variable nonmanufacturing costs.
C. all fixed costs.
D. all future costs, both variable and fixed.

Answer 1

Correct answer is D. All future costs, both variable and fixed

Step-by-step explanation:

In target costing, all future costs both variable and fixed costs are relevant. This is for us to clearly determine the desired profit that the company wants to attain. The process of costing is to determine all future costs that the company will possibly incur in the production and add it to the desired profit margin to know the unit sales price of the product.