acc560 week 5 discussion 2

acc560 week 5 discussion 2 -...

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Discuss the various situations when a company places its greatest focus on target cost. Explain  how the target cost is determined. A company computes a target cost when developing a product in a competitive market where the market determines  a product price.  Target costing is the process of determining the maximum allowable cost for a product and then  developing a prototype that can be profitably manufactured and distributed for that target cost figure.  Target costing is widely used in the automobile firms, such as Toyota, Nissan and Honda.  In the automobile industry,  for example, the target cost for a new model is decomposed into targets costs for each of the elements of the car -  down to a target cost for each of the individual parts.  Most of the cost of a product is determined in the design stage 
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This note was uploaded on 02/01/2012 for the course ACCT ACC560 taught by Professor Lorij.perez during the Spring '10 term at Strayer.

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