Can anyone explain why the answer is b?
Several surveys point out that most managers use full product costs, including unit fixed-costs and unit variable costs, in developing cost-based pricing. Which one of the following is LEAST associated with cost-based pricing?
a. Price justification
b. Target pricing
c. Fixed-cost recovery
d. Price stability
So I understand that target costing is used when you have a competitor who is also a cost leader setting prices and you back into your target cost using the market price and a desired profit margin. In Becker, Olinto said that you then use the target cost for target pricing. Wouldn't that be a form of cost-based pricing (i.e., setting your target price based on your computed target cost)?