What are the two factors against which the cost of production is measured in relation to the target cost?

The correct response pertains to the analysis of production costs where both quantity and quality play crucial roles. Measuring against target costs involves evaluating how much of the product is being produced (quantity) and the standard of that product (quality). When assessing production decisions, companies need to ensure they are meeting the target cost while maintaining an adequate quantity that satisfies market demand and ensuring that the quality meets or exceeds customer expectations. A balance between these two factors can influence pricing, profitability, and customer satisfaction, which are essential for any manufacturing operation to succeed.

In the context of the other choices, while they all relate to different aspects of production and costs, they do not encompass the primary factors that specifically measure against target costs as effectively as quantity and quality do. For example, materials and labor are components of cost but do not frame the broader perspective of how those costs relate to the overall output and its standards.