A number of terms are provided because customers set the price 1) Target pricing is a policy well suited to a highly competitive environment where the corporation is 2) Depending on the proportion of fixed costs in the pool, the management team must choose between 3) Cost leadership is an appropriate policy and the or a single-rate cool pool. most accurately reflects cost flows from support divisions back and forth among one another and to which are then the basis for all cost allocation To implement the reciprocal method, the support cost pools must be anthmetically adjusted to create is an improvement over the of applying support costs, but only reports the flow of support departments to one another in one direction. The support divisions are first ranked on some basis from highest to lowest flow of either costs or resources and then step down from the largest to smallest support division. Then the adjusted support cost pools are allocated to core operating divisions 4) The 5) arises when two or more users share benefits from consuming a corporate resource defines each cost object as if it were the only output. The ranks 6) There are two ways to recognize proportional cost and benefit. The those who share in benefits from incurring the total common cost pool from high to low. The highest ranked is the primary party who bears most of the total shared cost. The remaining incremental parties share the difference of the total common cost pool minus the costs allocated to the primary party. Disputes over the primary party often arise Terms artificial cost pools core operating division dual-rate sequential method price taker common cost Print direct method incremental cost allocation method stand-alone cost allocation method reciprocal method common cost pool Done X