Target costing versus transitional cost-reduction methods According to the chapter, the target costing and traditional cost-reduction methods approach the relationships among cost, selling price, and profit margin quite differently.

REQUIRED Write an essay that illustrates how the target costing and traditional cost- reduction methods differ, using the appropriate symbols and equations. In addi¬ tion to the equations, describe how the processes differ in deriving costs.

Management Accounting and Control Systems for Strategic Purposes 391 LO 3