Research On Management Application Of Target Costing

The target costing is the main object of study in this thesis, based on learning a foreign management experience, the current difficulties of product cost rise encountered in Chinese enterprises during the development process are expecting to be solved by using the target costing, the cost control problem are waiting to be fixed radically from the product planning and design phase, in order to increase the enterprise’s cost management capacity and improve the competitiveness of enterprises, the target costing study has an important practical value.In addition, target costing enriches and develops the cost management theory in the scope of management, management philosophy, management key points, management objectives, management methods, etc., which has a high value of theoretical studies. Based on the review of the existing literature review, it is found in this thesis that the target costing does never traced to its’theory source from the perspective of management theory, as few selected cases in this application are related to the military industries, it is hoped that the thesis can supplement the target costing research from these two aspects. Firstly, this thesis traces the theory source for the target costing management method application from a systems theory, value chain theory, product life cycle theory, Porter competitive strategy theory, global development strategy theory and Balanced Scorecard theory, to have an initial introduction of target costing management method. On this basis and combine enterprise’s product development, production and sales phase, to divide the management process of target costing into four parts:target cost formulation and division phase, target cost implementation phase, target cost continuous improvement and specific realization phase, target cost extensional management phase. Besides, through a comparative analysis with traditional cost management, it is found that the target cost has a concept for the flexible use of management organization system with a reverse operation of the value chain and throughout the product life cycle, which is able to enhance the enterprise’s competitive advantages for the implementation purposes and have a the full application of non-financial information with a long-term perspective, so that we can analyze the application effect of significantly reducing the costs and enhance enterprise competitiveness, the give the target costing a complete summary.Then, take the rare cases of military industrial enterprises in existing literature to analyze the practical application of target costing in these enterprises, it is discovered that the three aspects as product design,business developmentand business process management are closely linked to the cost management, to encourage the financial situation, improve competitiveness and enhance global business ranking for these enterprises; at the same time to give also the improvement suggestions when a number of shortcomings found in the practical application of the cost method. With the reform of the price system of military products, it is proposed to extend the target costing method to the relevant enterprises in military field and establish and improve the database.For product design and target cost, the target cost should be timely adjusted and improved based on different scenarios, and combined to activity-based costing, in order to get a reasonable simplification of cost-sharing during this period. For business development and cost management, they should be combined with plan, quota and target cost, with more consideration to market competitive analysis, changes in resource prices and other market factors, take into account in meanwhile the global situation, long-term information and time domain fixed by extending the quota; the implementation of fixed costs can be referred to the management of difference in target costing method, to obtain a further precision and simplification for target objective; the decision of consolidation for the station distribution depends on the actual situation. Business process and cost management should promote a bidirectional adjustment for the target cost and product design.