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<p>The paper concerns the practical application of Target Costing to a specific product of the woodworking industry with a particular emphasis on customer needs and value analysis principles concerning individual components and functions of the product — a wood-aluminium window Gemini Quadrat FB. Based on principles of value analyses, the study used the functional cost analysis, the quantified target cost index of relevant components and the target cost chart for the allowable cost of components. Two levels of the q parameter — 5 % and 10 % — were used to construct the target cost chart. The target price (EUR 513.19) was assessed. The target production cost was at the level of allowable production costs (EUR 379.31). The results were used to confirm that the ideal value of the target cost index was not achieved for any component, and a higher value of the parameter q can be marked as soft. The paper provides assumptions for the assessment of possible alternatives and potential corrections. The case study presents the description of the Target Costing methodology along with the nuanced characteristics of the approaches used by various authors and the strengths and benefits of using the method.</p>
</abstract>

The paper concerns the practical application of Target Costing to a specific product of the woodworking industry with a particular emphasis on customer needs and value analysis principles concerning individual components and functions of the product — a wood-aluminium window Gemini Quadrat FB. Based on principles of value analyses, the study used the functional cost analysis, the quantified target cost index of relevant components and the target cost chart for the allowable cost of components. Two levels of the q parameter — 5 % and 10 % — were used to construct the target cost chart. The target price (EUR 513.19) was assessed. The target production cost was at the level of allowable production costs (EUR 379.31). The results were used to confirm that the ideal value of the target cost index was not achieved for any component, and a higher value of the parameter q can be marked as soft. The paper provides assumptions for the assessment of possible alternatives and potential corrections. The case study presents the description of the Target Costing methodology along with the nuanced characteristics of the approaches used by various authors and the strengths and benefits of using the method.

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Engineering Management in Production and Services

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The paper concerns the practical application of Target Costing to a specific product of the woodworking industry with a particular emphasis on customer needs...

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Online veröffentlicht: 02. Feb. 2022

Seitenbereich: 148 - 159

Eingereicht: 15. Juni 2021

Akzeptiert: 30. Okt. 2021

DOI: https://doi.org/10.2478/emj-2021-0037

Schlüsselwörter
allowable cost, price, profit, Target Costing, target cost index, wood-aluminium window

© 2021 Marek Potkány et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Online veröffentlicht: 02. Feb. 2022

Seitenbereich: 148 - 159

Eingereicht: 15. Juni 2021

Akzeptiert: 30. Okt. 2021

DOI: https://doi.org/10.2478/emj-2021-0037

Schlüsselwörterallowable cost, price, profit, Target Costing, target cost index, wood-aluminium window

© 2021 Marek Potkány et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Schlüsselwörter
allowable cost, price, profit, Target Costing, target cost index, wood-aluminium window