Discussion On Target Costing & Its Application In China

This paper deals with target costing and its application in China. Target costing is originated from TOYOTA. It is very popular in Japanese enterprises and has created great achievements for them. Japanese enterprises take target costing as an all-around profit management method. It includes much advanced cost management thoughts that deserve to be learned by domestic enterprises. However, target costing has some shortages and limitations that should be envisaged and solved effectively.The main purpose of this paper is to instruct the domestic enterprises to use target costing to better their cost management. As comparing the Hangang experiences with target costing, we could find that there are many essential differences between them although they have some common in some parts. The application of target costing is very significative in China due to the much severely competition after China became one member of the WTO. This paper also gives many ideas on how to implement and improve target costing when it's applied in China enterprises.