Target Costing:
Target costing is based on the principle that the product cost is computed for variable or total cost (based on the management policy) on the basis of actual cost incurred and also the costing based on market retail price is computed by deducting the target income from that product.
The target product cost computed on product retail market price is compared to the actual product cost so as to analyze the difference in the costing and to analyze whether the business is able to market its product.
Requirement:
The computation of Target full product cost.
Requirement2:
To analyze whether the business is able to achieve the target income.
Requirement3:
The Computation of new target fixed cost and analyzing whether reduced variable cost able to achieve the target income.
Requirement4:
The computation of cost plus price of the product.
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Horngren's Accounting (11th Edition)
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