Which of the following statements describes target costing?
A) It is based on traditional cost-based pricing.
B) It generally computes the target cost to be higher than the full product cost of the product
or service.
C) It starts with the target sales price and subtracts desired profit to attain the target cost.
D) It starts with the target cost and adds desired profit to attain the target sales price.
C
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When expenses, such as employee wages, are not paid for until after they have been performed, the accrued expense is recorded in the accounts by an adjusting entry at the end of the accounting period.
a. true b. false
A back-of-the-envelope approach to calculating lifetime customer value (LCV) is a margin "multiple," which can be used to multiply the current margin generated by each customer to estimate the LCV
This multiple is shown by the formula: r/(1 + i + r). In this formula, "r" stands for: A) retention rate for the product. B) failure rate for the firm's products. C) rate of return of the product by the customers. D) the reliability of the product.