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The strategy of first determining what the market is willing to pay and then subtracting a desired profit margin to determine a desired cost of production is called:

A. cost-based pricing
B. target costing
C. penetration pricing
D. skimming pricing

Sagot :

GinnyAnsweridn

Final answer:

Target costing is a pricing strategy that involves determining market prices and subtracting desired profit margins to derive production costs.


Explanation:

Target costing is the strategy of first determining what the market is willing to pay and then subtracting a desired profit margin to determine a desired cost of production.

This method enables a business to strategically set prices based on market expectations while ensuring a specified profit margin.

By applying target costing, companies can align their pricing strategies with market demands for optimal profitability.


Learn more about Target costing here:

https://brainly.com/question/44668359


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