[Sharonlee]

Thank you

[Sharonlee]

Alright thank you so much!

[Sharonlee]

I’m just trying to relate the topic. As I thought design cost will be part of R&D cost and R&D is usually treated as period cost. So, special thing about target costing is it considers design cost also? Thank you so much for your clarification!

[Sharonlee]

Understood! but what about pricing matter? Non-production overheads will be part of it to arrive the total cost and add profit margin to establish selling price.

[Sharonlee]

Isn’t that design cost more likely to be included as part of the costing in life cycle costing?

[Sharonlee]

How does it happen in real life? Do you mean that we might not trace it so precisely using cost driver but just spread it randomly like a percentage of prime cost?

[Sharonlee]

Yes, I have watched them but no emphasis put on this.

Since Marginal costing also using a predetermined rate, why will it not have the problem of over/under-absorbed?

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