Research On Target Costing In Manufacturing R & D Center

Cost and quality of product is an everlasting theme of company, because they are very important to the profit. Business operation and capital operation are pursuing on market economic condition. To minimize cost consumption and maximize capital incremental profits are the direct objective and main target.In our country, many company come from the old system, the level of cost management isn't good, it's not fit the new system. So it's always the factors which prevent enterprises, especially state-owned enterprises, from survival, making profits and developing. As the system developing fast and the customer becoming wise, people put more attention on all the cost of lifecycle. So the cost and quality of production lifecycle become more important to the company, it like an enterprise symbol to meet the demands of cost management in market economic conditions.As the market economic becoming good and world economic becoming one unit, Chinese company meet competition from all over the world. For the long views, production can be accepted by the consumer, it must have low cost and high quality. Now many enterprises want to gain more profits in conditions that guarantee product quality and function on a lower investment and lowest cost basis. The implementation of target costing management is the most effective solution.Target costing is a kind of CM pattern which prevails in Japanese enterprises. It was innovated and expanded based on target management, which was brought in from America. The target costing is a difenrence of acceptable price and anticipated profit.Target cost management combines business operation and development strategy with market competition organically. It has been adopted by many enterprises and the results are very effective. In view of this, there is an urgent need for improving and innovate the cost managing idea and method. In this way, cost managing theory and content systematization will be achieved. Also, the target of minimizing enterprises cost consumption and maximizing capital incremental profits can be realized.At the beginning of 90's last century, FAW R & D Center established corresponding organization and started target costing activity. However, there isn't a full market competition. At that time, automobile was not worried to be sold out, the enterprise put more attention on how to produce production to meet the demand rather than reduce the cost. This result in the target cost organization suffered from twists and turns.At the beginning of this century, as the opening of the market, the national make more relaxed policy for the export and import of automobile industry. Not only the home automotive enterprise flood into the marketplace, but also the foreign automobile leaders flow into the market. The automobile business enterprises are meeting unprecedented competition. Whether each business enterprise can launch the quality products with low price and high performance has become the prerequisite for them to survive and go to success. Judging form the current market trend, Japan automobiles won out with its low price and high performance advantage on the marketplace. Their business profitability is also better than the others. Because the domestic automobile business enterprises haven't formed an effective management system, they are facing the business development bottleneck. As we all know that about 70%-80% of product cost is decided in the design phase, so seting up cost management system is very imported.This paper makes an introduction of target costing from different aspects. The focus is target costing in R&D Center, with the using concretely for the background of this company project cost control system. The argumentation of this thesis divides into five parts of contents. I expatiate on the theory and implementation of target costing, then I persuade people to make a decision that target costing is very imported to the company under this situations. Last but not the least, summarize the key points in target costing management that domestic auto industries should pay attention to and look into the future prospect.