ACCA PM知识点:目标成本例题

Example:If a company normally expects a mark-up on cost of 50%and estimates that a new product will sell successfully at




If a company normally expects a mark-up on cost of 50%and estimates that a new product will sell successfully at a price of$12,then the maximum cost of production should be$8:


This is a powerful discipline imposed on the company.The main results are:

The establishment of multifunctional teams consisting of marketing people,cost accountants,production managers,quality control professionals and others.These teams are vital to the design and manufacturing decisions required to determine the price and feature combinations that are most likely to appeal to potential buyers of products.

An emphasis on the planning and design stage.This becomes very important to the cost of the product because if something is designed such that it is needlessly expensive to make,it does not matter how efficient the production process is,it will always be a struggle to make satisfactory profits.

Here are some of the decisions,made at the design stage,which can affect the cost of a product:

the features of the product

how to avoid‘over design’

the number of components needed

whether the components are standard or specialised

the complexity of machining and construction

where the product can be made

what to make in-house and what to sub-contract

the quality of the product

the batch size in which the product can be made

You will see from this list that activity-based costing can also play an important part in target costing.By understanding the cost drivers(cost causers)a company can better control its costs.For example,costs could be driven down by increasing batch size,or reducing the number of components that have to be handled by stores.The concept of value engineering(or value analysis)can be important here.Value engineering aims to reduce costs by identifying those parts of a product or service which do not add value–where‘value’is made up of both:

use value(the ability of the product or service to do what it sets out to do–its function)and

esteem value(the status that ownership or use confers)

The aim of value engineering is to maximise use and esteem values while reducing costs.For example,if you are selling perfume,the design of its packaging is important.The perfume could be held in a plain glass(or plastic)bottle,and although that would not damage the use value of the product,it would damage the esteem value.The company would be unwise to try to reduce costs by economising too much on packaging.Similarly,if a company is trying to reduce the costs of manufacturing a car,there might be many components that could be satisfactorily replaced by cheaper or simpler ones without damaging either use or esteem values.However,there will be some components that are vital to use value(perhaps elements of the suspension system)and others which endow the product with esteem value(the quality of the paint and the upholstery).

ACCA PM知识点:Target costing