Question 1: True / False Qmeations (8 marks) (A1)

1.

A risk with target costing is that cost reductions may affect the percened value of

the product.

2. An effective way of reducing the projected cost of a new product is to simplify the

design

3. The value of target costing depends on having reliable estimates of sales demand.

4. An important use of life cycle costing is to decide whether to go abead with the

development of a new product.