Question

The following are all characteristics of target costing except: Select one: a. Driving costs down while satisfying customer needs. b. Emphasizing the product's functional characteristics and their importance to the customer. c. Understanding the pricing process in order to increase selling prices. d. Reducing development time.

Answer 1

The correct answer is letter "C": Understanding the pricing process in order to increase selling prices.

Step-by-step explanation:

Target costing is a management system that pushes companies to replan and value each point and element that contribute during all the life cycle of the product or service. Target costing forces organizations to have a continuous improvement vision that allows them to reduce costs by implementing a proper cost accounting system.

Target cost, then, aims to reduce costs, keeping expected revenue, quality of the product including reducing production time. This system does not involve taking steps to boost sales either understanding pricing cycles.

Answer 2

d. Reducing development time

Step-by-step explanation:

It is easily evident from the question that all the other options apart from "Reducing development time" are basically exercised when target costing is kept in mind. Hence target costing and development time has no real connection as such, which justifies my answer above.

Hope this helps you out.

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