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An estimated cost per unit in long run, which enables company to achieve it's per unit target, operating income is classified as

A. target operating income per unit

B. target cost per unit

C. total current full cost

D. total cost per unit

Answer: Option B

Solution(By Examveda Team)

An estimated cost per unit in long run, which enables company to achieve it's per unit target, operating income is classified as target cost per unit. The target cost of a product is the expected selling price of the product minus the desired profit from selling it. In other words, target cost is really a measure of how low costs need to be to make a certain profit.

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