alleryStart learning →Allowable cost in target costing is derived from which factor, ignoring design capability?
ASupplier price quotes
BPast actual costs
CExternal market state
DShop floor wage rates
Answer & Solution
Correct answer: C. External market state
Allowable cost comes from the price and margin set by the market, so it may be unachievable and has to be adjusted to a target cost.
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