Correct Answer:
B. Target selling price minus desired profit
Under target costing, price is set by the market and cost is managed to achieve the required profit.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
Target costing computes the target cost as:
Related MCQs
Standard costing is a technique in which:
A.
Only actual costs are recorded
B.
Costs are ignored
C.
Selling prices are fixed by law
D.
Predetermined costs are compared with actual costs to compute variances
Correct answer is:
D. Predetermined costs are compared with actual costs to compute variances
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In process costing, the weighted average method:
A.
Keeps opening WIP costs separate from current costs
B.
Ignores opening WIP
C.
Ignores current period costs
D.
Combines the cost of opening WIP with current period costs
Correct answer is:
D. Combines the cost of opening WIP with current period costs
Do you agree with this answer?
A bond with a 10% coupon will sell at par if the market interest rate is:
A.
8%
B.
10%
C.
12%
D.
5%
Correct answer is:
B. 10%
Do you agree with this answer?
The agency problem arises from a conflict of interest between:
A.
Customers and suppliers
B.
Managers and shareholders
C.
Auditors and tax officers
D.
Employees and customers
Correct answer is:
B. Managers and shareholders
Do you agree with this answer?
A machine costs Rs. 100,000, has a residual value of Rs. 10,000 and a useful life of 5 years. Annual straight-line depreciation is:
A.
Rs. 18,000
B.
Rs. 20,000
C.
Rs. 22,000
D.
Rs. 90,000
Correct answer is:
A. Rs. 18,000
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Contribution margin is Rs. 120,000 and operating income is Rs. 30,000. The degree of operating leverage is:
A.
0.25
B.
3
C.
90,000
D.
4
Correct answer is:
D. 4
Do you agree with this answer?
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