Target costing was first implemented in 1963 by Toyota and had its break-through in the seventies in Japan. Since the beginning of the nineties target costing is used in Anglo-American Countries and Germany (Zerth, Martin).

Unlike traditional cost management, target costing is concentrated outward and market driven – the customer comes first. Target costing management is based on the idea that the cost of a product can hardly be changed after the design process. But in today’s competitive business environment companies are not a

4.1.3 Stage three – Determining a new product’s basic design

During stage three the product underlies a grater design specification, a closer performance and cost valuing. The product development manager is responsible for the integration and communication among the different departments. He requests each department to review the material requirements, manufacturing processes and estimated costs of the new product to generate new ideas.

4.1.5 Stage five – Transfer of the plan to production

Allowable cost = target sales price – target profit

Therefore, target costing does not consider what a product will cost. Instead of this target costing considers how much the customers are wiling to pay for a product. The price determines the cost – the cost does not determine the price (Kehl, Leonhard).

4.1 The five stages of target cost management

Some topics in this essay:
Krystek Ulrich, Martin Below, Zerth Martin, Willax Paul, Target Costing, Chen Chung, Japan American, target costing, Kehl Leonhard, target cost, Jahn Domenico, Domenico Krystek, domenico krystek ulrich, jahn domenico krystek, krystek ulrich, domenico krystek, jahn domenico, cost management, stage �, cost product, value engineering, product cost, stages target cost, production jahn domenico, five stages target,