Target costing is another way to "watch" costs. Discuss.
Traditional wisdom was to create a product, figure out the cost, add a profit margin, and then determine the price. Target costing is another way to "watch" costs and setting prices. See references below.
Accounting for Management. (n.d.). Target Costing Approach to Pricing. Retrieved from http://www.accountingformanagement.com/target_costing_pricing_products_and_services.htm
J Feil, P. , Yook, K., & Kim, I. Japanese Target Costing: A Historical Perspective. (2004, Spring). International Journal of Strategic Cost Management. Retrieved from http://economiceducation.us/dotAsset/785833.pdf
Part 5 Target Costing. BMALeanManagement. (2011, July 4). YouTube Video. Retrieved from http://www.youtube.com/watch?v=hiiw1t4DA0Q
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Traditional wisdom was to create a product, figure out the cost, add a profit margin, and then determine the price. Target costing is another way to "watch" costs and setting prices.
Target costing means that you start considering cost before the product is even designed. You first decide what the customer wants (product, features, life cycle, durability) and what they are willing to pay for it. Then, you attempt to create a product with the features that the customers wants within the cost needed to yield a profit margin (you already know the market price so you back into the cost by assuming a profit margin).
This ...
Solution Summary
Your tutorial is 262 words plus four references and explains how target costing works and gives an example for a service industry as well as a manufacturing example.
... level of quality and durability to reach the cost target. ... are that managers tend to watch their activity ... system, the team might think those costs are variable. ...
... The Timex target consumers are not influenced by the store ... to be distributed online since it targets a wide ... www.bnet.com/blog/business-myths/price-cutting-peril ...
... Accessories: hats, headbands, barrettes, bracelets, watches, watch bands, ID ... the clothing at a cheaper cost, and then ... I would target first time parents that ...
... any Dell SMB catalogue and you'll find Watch Guard firewall ... advertisement - When they want to reach their target market - Most cost efficient methods to ...
... Electronics buyers are the target segment that is ... processes to ensure that marketing costs remain within ... of the sales revenue and profit targets depends on the ...
... Next, considering various segments and possible target markets would also ... option would be to recommend a retail price for the video phone watch at £1,000. ...
... and recognizing the segments and the targets that may ... and then moving on to the next target company ... lends itself to relationship selling, and price rarely comes ...
... outlets and cornered the low to mid-price watch market. ... http://www.target-news.info/ target_logistics.htm. Are total systems costing being used for analysis? ...
