Management Accounting

In calculating the target cost estimate calculation traditional 'cost + profit', which determine the price of the product, based on the required expenditures and expected return should be replaced by the following calculation scheme. Target price – it's a price that customers are willing to pay for the product 1. 211. Thus, it is determined by the price predisposition customers, which can be determined using various methods to search for prices on a new product. Target price on how target costing need to be defined by the market, ie either through market research. Achievable target price, some enterprise managers, reduced by the target profit. Profit – a pre-planned business rate.

Ideally, the value of the target revenue (plan) should cover the needs of the enterprise to his development and satisfaction of owners). The difference between target price and target profit gives the allowable costs, ie such costs, which in theory should not be exceeded in the production process in order to ensure the market success of the product in the long term 3, c. 17. Depending on the competitiveness and economic strategy of the company target cost, which it tends to be located between the admissible costs and regulatory costs. In the applied aspect of target costing can be attributed a number of different calculation methods related to the calculation and analysis of the target cost. However, global practice development target costing suggests that, in most cases, the target cost management system is mandatory aggregated with elements of activity-based costing, which is dictated by the orientation target costing on customer specific requests 4. Thus, we conclude that the target cost management as a tool for strategic planning allows controlling the production of new products control costs, calculate the target cost in accordance with market conditions, which directly influences the level of competitiveness. References 1.

Drury, Introduction to management and production accounting: study guide for high schools. M: Audit, 2004. – 265s. 2. Koltyarov SA Managing costs. – St. Petersburg. Peter, 2004. – 160s. 3. Mishin, Y. Managerial Accounting: cost management and production results activity. Moscow: Delo i Servis, 2002. – 176s. 4. Pashigoreva GI Savchenko, O. Managerial accounting and analysis. St. Petersburg. Peter, 2003. – 237s. 5. Sysoev, NI Reflection of costs in Management Accounting / Bookkeeping. 2002. 6. – 55c.

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