Question

All of the following are steps of target costing except: (5pts) a. maximizing the contribution margin per unit of constrained resource. b. engineering the product to achieve the target cost. c. designing a product that provides the features and price demanded by customers. d. deriving the target cost by subtracting the desired profit. e. None of the answer choices is correct. 11) Which of the following is not considered relevant when considering a make-or-buy decision? (5pts)

a. The effect on variable costs.

b. The effect on employee morale.

c. The quality of the outsourced product.

d. The effect on unavoidable fixed costs.

e. None of the answer choices is correct.

12) The payback period is typically stated : (5pts)

a. in days, months, or years.

b. as a percent.

c. as a dollar amount.

d. in the same format as the required rate of return.

e. None of the answer choices is correct.

13) Which of the following is a benefit of using the payback method? (5pts)

a. It considers the time value of money.

b. It considers the cash inflows after the initial cash outflows are recovered.

c. It measures profitability.

d. It determines how long it will take to recover the initial investment.

e. None of the answer choices is correct.

Answer 1

Solution 10:

All of the following are steps of target costing except maximizing the contribution margin per unit of constrained resource.

Hence option "a" is correct.

Solution 11:

The effect on unavoidable fixed costs  is not considered relevant when considering a make-or-buy decision.

Hence option "d" is correct.

Solution 12:

The payback period is typically stated in days, months, or years.

Hence option "a" is correct.

Solution 13:

The benefit of using the payback method is that it determines how long it will take to recover the initial investment.

Hence option "d" is correct.