Target osting目标成本法.pptVIP

Tehran UniversityManagement FacultyManagement Accounting Presentation Target Costing Outline Definition of target costing General concept Target costing characteristics Target costing process Establishing target cost Achieving target cost Organizational impact Conclusion Target Costing A target cost is the allowable amount of cost that can be incurred on a product and still earn the required profit from that product A strategic profit and cost management process Price-led Customer-focused Design-centered Cross-functional Life cycle oriented Value Chain-based Target Costing Characteristics To these Contradicts the traditional approach: design product, determine cost, set price Intense customer focus What do they want? How much will they pay for it? Can we make a profit on it? Want answers questions before committing to the project Target Costing Characteristics Cost control from the beginning 70-90% of costs are committed to at the design stage Focus on product and process design to engineer out costs from the beginning Target Costing Characteristics Product, manufacturing process, delivery process designed simultaneously Ensures features customers demand, but within acceptable cost parameters Eliminates the temptation to add costly features Customers may not value the added features Target Costing Characteristics Cost control at all phases of the product life cycle Design Production Delivery/setup Customer’s cost of ownership Service and repair Disposal and recycling Cross-Functional Team Marketing Design/engineering Manufacturing Purchasing Including suppliers Distribution Service/support Cost accounting Finance Legal The Target Costing Process Target Costing Process Two stage process Establish the target cost Market research Product planning, concept development stages Achieve the target cost Value engineering, continuous improvement Design stage Continuous improvement in later stages Establishing the Target Cost Determine the product and i