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Book Chapter10.1007/978-3-322-84457-6_12

Target Costing as a Strategic Controlling Instrument

Horst Glaser-2002-01-01-Strategic Management
4

TL;DRAbstract

Target costing, also known as “target-cost management”, can be seen as a shift in the traditional “view on costs” in corporate philosophy. “How much will the product cost?”, is not the question anymore, but “How much is a product allowed to cost?”. This means that the costs to be budgeted for a product [to be designed in future] don’t have to be determined by the current conditions for production and procurement but by the actual conditions of the market for the product in question.

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Target costing, also known as “target-cost management”, can be seen as a shift in the traditional “view on costs” in corporate philosophy. “How much will the product cost?”, is not the question anymore, but “How much is a product allowed to cost?”. This means that the costs to be budgeted for a product [to be designed in future] don’t have to be determined by the current conditions for production and procurement but by the actual conditions of the market for the product in question.

Keywords

Product cost managementActivity-based costingProcurementProduct (mathematics)Target costingBusinessCost accountingProduction (economics)

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