example of target costing

example of target costing is a five step technique that is adopted to take out the goal of costing procedure. Step 1 contains approximation of a selling price at which a product could be sold. Step 2 is then estimating the preferred profit margin. Step 3 is the deduct the profit margin from the selling price to reach your destination at target cost. Step 4 is to calculate the estimate cost of the product and compare it with target costing. Step 5 is the dissimilarity is recognized know as the cost gap that needs to be closed.so that is the example of target costing.

Target Costing Approach to Pricing

Learning Objective of the Article: Define and explain target costing. Compute the target cost for a new product or service. What are advantages and disadvantages of target costing approach. In traditional costing system it is presumed that a product has already been developed, has