Target Cost is calculated as: MCQ with Answer and Explanation

Target Cost is calculated as:
A. Current Cost - Desired Profit
B. Variable Cost + Fixed Cost
C. Expected Selling Price - Desired Profit Margin
D. Prime Cost + Factory Overheads
Answer: Option C
Solution (By JKSSB Mock Tests)
Target costing starts with market price, subtracts the required profit, to find the maximum allowable cost (Target Cost).

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: Revaluation Account is a nominal account. S2: Revaluation Account is prepared to ascertain the profit or loss on revaluation of assets and liabilities. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S2 only
C. S1 only
D. Both S1 and S2

Correct Answer: Option D


Explanation:
Revaluation Account records expenses (decreases in asset values) and incomes (increases in liability values), making it a nominal account. Its purpose is to calculate the net effect of revaluation on partners' capital. Both are correct.

Question #2
The 'GST Refund' for zero-rated supplies without payment of tax (under bond/LUT) can be claimed for:
A. Unutilised input tax credit
B. Output tax only
C. No refund
D. Both output tax and input tax credit

Correct Answer: Option A


Explanation:
When export is under bond/LUT without payment of IGST, refund of accumulated input tax credit can be claimed.

Question #3
The 'Country-by-Country Report' (CbCR) filing in India is required for MNE groups with consolidated revenue exceeding:
A. ₹1,000 crore
B. ₹5,500 crore (€750 million)
C. No threshold
D. ₹500 crore

Correct Answer: Option B


Explanation:
The threshold is aligned with BEPS Action 13, i.e., €750 million.