Please choose one answer for each and clearly identify the choice

Price savings from taking a quantity discount must be compared to additional costs from higher inventory levels to determine if the return on investing those extra dollars in those specific goods is worth it.

**True

**False

The purpose of target costing is to focus everyone on cost management so that management can execute the pricing strategy and achieve profit targets. Subtracting the ____________ from the selling price reveals the target cost. All costs (design, supply and manufacture) must not exceed this target.

**general, administration, and service

**profit target

**cost of goods sold

**overhead

The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called:

**activity-based costing

**total cost of ownership

**target costing

**competitive bidding