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What is the difference between traditional based costing and target costing?
Wiki User
∙ 14y ago
Traditional Cost Accounting System: In this system company first produce the product and then determine the cost of production and then try to sell that product at price covering that cost plus certain percentage of markup on cost.
Target Costing: In this system first of all company determines the value of product in the eyes of customer that is how much a customer is willing to pay for the product and then if cost of production of that product is more then the customer willing to pay then company makes analysis of how they can reduce the cost of production to the level of cost a customer willing to pay by reducing the components of product which is costing towards final price but not giving any value to customer and in this way company tries to acheive the target cost customer willing to pay.
Wiki User
∙ 14y ago
Wiki User
∙ 14y agoTarget Costing: In this system first of all company determines the value of product in the eyes of customer that is how much a customer is willing to pay for the product and then if cost of production of that product is more then the customer willing to pay then company makes analysis of how they can reduce the cost of production to the level of cost a customer willing to pay by reducing the components of product which is costing towards final price but not giving any value to customer and in this way company tries to acheive the target cost customer willing to pay.
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Difference between absorption costing AND target costing?
Target costing is when you have a goal for the project and its costs. Absorption costing is when you need to fix the excess spending.
What is the difference between target costing and life cycle costing?
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.
What are the differences between standard and target costing?
Standard costing will be the price for something. Mostly in every store. The target costing is when one says what one is willing to pay and they can negotiate the cost.
What is the difference between target costing and cost-plus pricing?
Target Costing: It is the costing process in which company tries to reduces all costs of product to limit the selling price at specific targeted selling price. Cost Plus pricing: It is pricing method in which company uses all costs plus certain percentage of that cost as a profit margin to set selling price.
What are the tools and techniques of cost management?
Activity based Costing, Target costing, Just in Time,Total Quality Management,
Difference between absorption costing AND target costing?
Target costing is when you have a goal for the project and its costs. Absorption costing is when you need to fix the excess spending.
What is the difference between target costing and life cycle costing?
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.
What are the differences between standard and target costing?
Standard costing will be the price for something. Mostly in every store. The target costing is when one says what one is willing to pay and they can negotiate the cost.
What a comparison and contrast between target costing and life cycle costing?
Please help me in nswering this question
Contrast between target and kaizen costing?
they diffrent methods
Meaning and nature of target costing?
definition of target costing
Example for backflush costing and target costing?
for backflush costing and target costing?" Refer this link www.iugaza.edu.ps/users/shelles/Horngren/ch14.ppt
What is the difference between target costing and cost-plus pricing?
Target Costing: It is the costing process in which company tries to reduces all costs of product to limit the selling price at specific targeted selling price. Cost Plus pricing: It is pricing method in which company uses all costs plus certain percentage of that cost as a profit margin to set selling price.
Define process costing its types features applications?
Job Order Costing Operation Costing Normal Costing Actual Costing Standard Costing Kaizen Costing Target Cost
Which is the best costing system for Automobile Industry?
process costin and target costing
What is the difference between target and super target?
One is smaller than the other
What is the difference between target costing and kaizen costing?
In target costing the costs is determined by finding out how much the customers are willing to pay for the service or product. The selling price is adjusted for the profit which determines the cost at which the product or service should be produced. When the target cost is less that the actual costs then decisions needs to be made to reduce the costs. For example the remove non value adding features to the product or service. Kaizen costing involves the continuous addition of small costs to the product or service until it meets its desired level for the customer. Target costing can said to be retrospective costing whilst kaizen is prospective costing.
