The primary objective of target costing is ascertaining product costs and determining the product price based on customer preferences. Therefore, the concept of target costing includes strong market orientation of the whole enterprise and cost management. The most important question is: “What is a product allowed to cost?” and not “What will a product cost?” The question about the price accepted by the market is always connected with the question about optimum customer benefits.
The current white paper by Tobias Riffel summarises all of the important fundamentals on the issue of target costing and uses examples to clarify its specific implementation in practice. He addresses the market-into-company method and explains the difference between allowable costs and drifting costs. It’s concluded with a short reflection on the challenges in the course of target costing.
Interested in reading this white paper?
Request free of charge now!
Please fill in the form. We will send you the document straight away.