The following points highlight the two main examples of target costing. The examples are: 1. Tata Rs 0.1-Million Car 2. Tata Rs 0.1-Million Car- Potential Competition. Example # 1. Tata Rs 0.1-Million Car: On 11 March 2003 Business Standard reported the following: Ratan Tata, chairman of India's second-largest and longest-established conglomerate, said, he is pressing ahead with a project to [...]
The following points highlight the seven main features of target costing. 1. Target Costing is viewed as an integral part of the design and introduction of new products. As such, it is part of an overall profit management process, rather than simply a tool for cost reduction and cost management. The first part of the process is driven by customers, [...]
Target costing is a structural approach to determine the cost at which a proposed product with specified function and quality must be produced, to generate a desired level of profitability at its anticipated selling price. In other words, Target Costing is a cost management tool for producing overall cost of product over its entire life cycle with the help of [...]