Question 1
When the firm uses the target-costing approach to pricing, the target cost per unit is the difference between the per unit target price and the per unit target ________.
◦ contribution margin
◦ operating income
◦ cost of goods sold
◦ gross margin
Question 2
Which of the following is an objective of value engineering?
◦ to reduce cost by eliminating all value-added activities
◦ to streamline and add non-value added activities
◦ to reduce the total cost of the product
◦ to understand competitors' product design