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Business English Exercises
 

Price-based or Target Costing

Answers to test questions and links to explanations

Home > Teaching Business English > Business English Lessons, Advanced Level # 136
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 All tests  Quiz  FAQ  ESL Forum  Dictionaries What is mean by Free-Float Market Capitalisation?
price-based or target costing answer 1
The target cost is a financial goal for the full cost of a product, derived from estimates of selling price and desired profit (which top management sets on the basis of firm strategy and financial goals).

Correct answer: (c) derived

Meaning of business term derived
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 meaning of "cash flow problems" Difference between 'target costing' and 'standard costing'
price-based or target costing answer 2
Product selling price is constrained by the marketplace and is determined by analysis along the entire industry value chain and across all functions in a firm.

Correct answer: (a) constrained

Meaning of business term constrained
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 3
Common to most target-cost applications is a belief that large-scale cost planning and reduction must occur early in the product life cycle.

Correct answer: (b) Common

Meaning of business term Common
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 4
However, Shank and Fisher believe there is no conceptual reason the methodology cannot be a value-added exercise applied to existing products during manufacturing.

Correct answer: (a) conceptual

Meaning of business term conceptual
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 5
They posit that if managers were to believe that, during manufacturing, only incremental (i.e., slight) change is possible, firms would likely miss significant strategic opportunities.

Correct answer: (b) posit

Meaning of business term posit
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 6
Shank and Fisher present a case study that demonstrates the relevance of target-costing techniques for a process-industry plant built in the 1890s that had been making largely the same products for fifty years.

Correct answer: (d) largely

Meaning of business term largely
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 7
The firm's managers, who had used a standard-cost system for many years, might have concluded that kaizen costing was most appropriate for this plant.

Correct answer: (a) kaizen

Meaning of business term kaizen
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 8
However, competitive realities necessitated a major strategic change that employed target costing as an important ingredient in cost-reduction efforts leading to strategic revitalization.

Correct answer: (c) ingredient

Meaning of business term ingredient
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 9
The standard cost concept essentially dropped out of the picture.

Correct answer: (b) picture

Meaning of business term picture
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 meaning of "cash flow problems" Ask a Teacher
price-based or target costing answer 10
Because standard costing accepts the existing game rules and the existing value chain, the authors believe that fundamental cost breakthroughs are much more probable when using target costing.

Correct answer: (c) breakthroughs

Meaning of business term breakthroughs
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