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Target costing is a pricing method used by firms. It is defined as "a cost management tool for reducing the overall cost of a product over its entire life-cycle with the help of production, engineering, research and design". A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required profit margin from that product at a particular selling price. In the traditional cost-plus pricing method, materials, labor and overhead costs are measured and a desired profit is added to determine the selling price. ==What is target costing== Target costing involves setting a target cost by subtracting a desired profit margin from a competitive market price. A lengthy but complete definition is "Target Costing is a disciplined process for determining and achieving a full-stream cost at which a proposed product with specified functionality, performance, and quality must be produced in order to generate the desired profitability at the product’s anticipated selling price over a specified period of time in the future." This definition encompasses the principal concepts: products should be based on an accurate assessment of the wants and needs of customers in different market segments, and cost targets should be what result after a sustainable profit margin is subtracted from what customers are willing to pay at the time of product introduction and afterwards. These concepts are supported by the four basic steps of Target Costing: * Define the Product * Set the Price and Cost Targets * Achieve the Targets * Maintain Competitive Costs. Japanese companies have developed target costing as a response to the problem of controlling and reducing costs over the product life cycle. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Target costing」の詳細全文を読む スポンサード リンク
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