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.