Target-Costing目標(biāo)成本法課件

1、Tehran UniversityManagement FacultyManagement Accounting PresentationTarget CostingVina TarjomanSupervisor : Dr. NikbakhtNovember,20191Tehran UniversityManagement Target Costing$2Target Costing$2OutlineDefinition of target costingGeneral conceptTarget costing characteristicsTarget costing processEst

2、ablishing target costAchieving target costOrganizational impactConclusion$3OutlineDefinition of target coWhat is Target Costing4What is 4Target CostingA target cost is the allowable amount of cost that can be incurred on a product and still earn the required profit from that productA strategic profi

3、t and cost management process Price-led Customer-focused Design-centered Cross-functional Life cycle oriented Value Chain-based$5Target CostingA target cost is General ConceptTarget cost is the cost that can be incurred while still earning the desired profitSelling price desired profit = target cost

4、The customer sets the priceProfit must be achieved through cost control$6 General ConceptTarget costTarget Costing CharacteristicsTo these Contradicts the traditional approach: design product, determine cost, set priceIntense customer focusWhat do they want?How much will they pay for it?Can we make

5、a profit on it?Want answers questions before committing to the project$7Target Costing CharacteristicsTarget Costing CharacteristicsCost control from the beginning70-90% of costs are committed to at the design stageFocus on product and process design to engineer out costs from the beginning$8Target

6、Costing CharacteristicsTarget Costing CharacteristicsProduct, manufacturing process, delivery process designed simultaneouslyEnsures features customers demand, but within acceptable cost parametersEliminates the temptation to add costly featuresCustomers may not value the added features$9Target Cost

7、ing CharacteristicsTarget Costing CharacteristicsCost control at all phases of the product life cycleDesignProductionDelivery/setupCustomers cost of ownershipService and repairDisposal and recycling$10Target Costing CharacteristicsCross-Functional TeamMarketingDesign/engineeringManufacturingPurchasi

8、ngIncluding suppliersDistributionService/supportCost accountingFinanceLegal$11Cross-Functional TeamMarketingConceptdevelopmentPlanningand marketanalysisProductiondesign andvalueengineeringProductionandcontinuousimprovementTargetpriceProfitmarginTargetcostEstablishing theTarget PriceAchieving the tar

9、get costThe Target Costing Process$12ConceptdevelopmentPlanninganTarget Costing ProcessTwo stage processEstablish the target costMarket researchProduct planning, concept development stagesAchieve the target costValue engineering, continuous improvementDesign stageContinuous improvement in later stag

10、es$13Target Costing ProcessTwo stagEstablishing the Target CostDetermine the product and its marketWho is the target market?What do they want?What do competitors offer?Introduce concept or prototypeEvolutionary or revolutionary?Refine until it meets customer needs$14Establishing the Target CostDeEst

11、ablishing the Target CostDetermine the selling priceMust be acceptable to the customerMust be able to withstand competitionExisting price +/- value of features added or deletedConsensus of focus groupPrice predicted to achieve a desired market share$15Establishing the Target CostDeEstablishing the T

12、arget CostDetermine the required profitReturn on salesDesired returnHistorical return for similar productsIndustry average for similar productsReturn on sales will fluctuate over the life of the productPrice and costs fluctuate$16Establishing the Target CostDeEstablishing the Target CostUnit price,

13、cost and profit are almost meaningless because they fluctuateLife cycle totals are more meaningful Total expected revenue throughout product life- Total desired profit throughout product life = Total target cost$17Establishing the Target CostUnAchieving The Target Cost18Achieving The Target Cost18TA

14、RGET COSTING.Achieving Target CostsInitialCost EstimatesPerformValueEngineeringPerformCostAnalysisDesignProducts/ProcessesRelease Design toProductionCOMPUTE COST GAPDESIGN COSTS OUTPRODUCECompareTo TargetCostACTUALCOSTEstimateAchievableCostUndertakeContinuousImprovement$19TARGET COSTING.Achieving Ta

15、Achieving the Target CostMust include the features the customer wants while maintaining cost at or below targetWant to meet the customers needs, but not exceed themEliminating desired features will result in an undesirable productAdding unwanted features will increase costFailing to keep cost at or

16、below target will result in unacceptable profits$20Achieving the Target CostMust Achieving the Target CostDetermine the cost gap between current cost and allowable costCurrent cost is based onCurrently used componentsCurrent suppliersCurrent manufacturing processesCurrent distribution networkEtc.$21

17、Achieving the Target CostDeterAchieving the Target CostDecompose the cost gap (exhibit 2)Life cycle decompositionCost reduction goals are divided among the functions in the products life cycleDesign/engineeringManufacturingSales/distributionService/supportGeneral administrationEtc.$22Achieving the T

18、arget CostDecomAchieving the Target CostValue chain decompositionCost reduction targets are divided among internal and external activitiesInternal costsLabor, overhead, selling and administrative costs, etc.External costsComponents and services acquired from suppliers, etc.Often represent a large pr

19、oportion of total cost$23Achieving the Target CostValueAchieving the Target Cost$24Achieving the Target Cost$24Achieving the Target CostPerform value engineering to design out costs without sacrificing needed featuresPerform a cost analysis of major components and activitiesList components or activi

20、ties and their functionsCalculate a cost breakdownDetermine the current cost of each component or activity and convert to percentage of total costCosts include materials, labor, overhead, etc.$25Achieving the Target CostPerfoAchieving the Target CostRank customer requirements (table 1)What does the

21、customer want?How important is each function to the customer?What do we and our competitors currently offer?Competitive evaluation (table 2)Do our current product features meet the customer needs?Are the customers needs met, unmet or exceeded?What can we learn from our competitors products?$26Achiev

22、ing the Target CostRank Prouct FeaturesCustomer RankingRelative Customer RankingGreat fit30%0.30Large selection15%0.15High product quality15%0.15Trendy appearance10%0.10Reduced shopping time15%0.15Advising,consulting5%0.05Delivery time10%0.10Sum:100%1.00Table 1: Cusomer Requirements$27Prouct Feature

23、sCustomer RankinAchieving the Target CostRelate the components to customer requirements (table 2)Develop Quality-Function-Deployment matrixIndicates which components have the greatest impact on customer requirementsDevelop a functional ranking (table 3)Indicates the importance of each component to t

24、he customerBased on the components contribution to providing the desired functions$28Achieving the Target CostRelatProductRCRSuitServiceCRCutFabric and access.MeasurementsCustomerGreat fit0.301=0.253=0.75DBig choice0.153=0.751=0.25CHigh product quality0.153=0.751=0.25BTrendy appearance0.103=0.602=0.

25、40BReduced shopping0.153=1.00DConulting0.053=1.00BDelivery time0.101=0.201=0.203=0.60ASum:1.00RCR= relative customer rankingCR= Competitive ranking3=strong correlation 2=modrate correlaion 1=weak correlationDegree of performance: A=excelent,B=good, C= moderate, D= lowTable 2: QFD-Matrix for Customer

26、 Requirements and Product Components29ProductRCRSuitServiceCRCutFabrProductRCRSuitServiceCutFabric and access.MeasurementsCustomerGreat fit0.300.25*0.30=0.080.75*0.30=0.22Big choice0.150.75*0.15=0.110.25*0.15=0.04High product quality0.150.75*0.15=0.110.25*0.15=0.04Trendy appearance0.100.60*0.10=0.06

27、0.40*0.10=0.04Reduced shopping0.150.15*1.00=0.15Consulting0.050.05*1.00=0.05Delivery time0.100.25*0.10=0.020.20*0.10=0.020.60*0.10=0.06Sum:1.000.160.280.220.34Table 3 : QFD- Computing the componenet value30ProductRCRSuitServiceCutFabricAchieving the Target CostIdentify components for cost reductionC

28、alculate a value index for each major component (table 4) Component cost as a percentage of total cost divided by the components relative importance to the customerIndex greater than 1Disproportionately high cost in relation to its importanceImplies cost reduction should be consideredDo not manage b

29、y the numbers alone$31Achieving the Target CostIdentProduct componentValueAllowable Cost per unitValue indexCut0.160.16*$324=$51.240.16 / 0.20=0.8Fabric and accessories0.280.28*$324=$90.270.28 / 0.25=1.12Measurement0.220.22*$324=$71.280.22 / 0.20=1.1Service0.340.34*$324=$110.160.34 / 0.35=0.97Table

30、4: allowable cost for product component32Product componentValueAllowablAchieving the Target CostGenerate cost reduction ideasSeek ways to accomplish the goal at less costConsider the process as well as the productMore efficient manufacturing processesBetter logisticsEtc.$33Achieving the Target CostG

31、enerAchieving the Target CostTest the ideasWill they be effective?Are they technologically feasible?Estimate the achievable costsUse activity-based costing, cost tables, etc.$34Achieving the Target CostTest Make the DecisionAchievetargetcost?Closeenough?Release designfor productionAbortprojectRepeat

32、valueengr.?Value engineeringYesNoYesNoNoYes$35Make the DecisionAchieveCloseROrganizational ImpactPositivesCustomer focusCross-functional integrationOpen sharing of informationBetter process understandingNegativesToo much customer focusPotential organizational conflictToo much pressure to attain targetsLonger development times$36Organizational ImpactPositivesConclusionSelecting target costing processUsing of cost reduction cultureDirecting material producerSharing staff in companys achievmentUsing of complete information systems$37