Target cost : In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost. Formula: Market price – Desired profit =Target cost To indicate : The conditions in which the target cost is focused by companies, and the way to determine target cost.

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Answer 1

Question

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

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Answer 2

Question

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Answer 6

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Answer 7

Chapter 8, Problem 2Q

To determine

Target cost: In a competitive market, companies cannot set prices because the supply and demand factors affect the product price. The companies should therefore, control costs, in order to earn a desired profit. Therefore, the cost which should be controlled and fixed by companies to earn a desired profit over the market price, is referred to as target cost.

Formula:

Market price – Desired profit =Target cost

To indicate: The conditions in which the target cost is focused by companies, and the way to determine target cost.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 8 - What are the two types of pricing environments for...Ch. 8 - Prob. 2Q Ch. 8 - Prob. 3Q Ch. 8 - Benz Corporation produces a filter that has a per...Ch. 8 - What is the basic formula for the markup...Ch. 8 - Prob. 6Q Ch. 8 - Stanley Corporation manufactures an electronic...Ch. 8 - Sheen Co. manufactures a standard cabinet for a...Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

Solution Summary: The author explains that in a competitive market, companies cannot set prices because supply and demand factors affect the product price. The cost which should be controlled and fixed is referred to as target cost.

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