“MONTCLAIR PAPER MILL'S EXPERIMENT WITH TARGET COSTING” – A CASE STUDY
Tactful Management Research Journal
Vol. 2 , Issue. 1 , Oct 2013
ISSN :2319-7943
Impact Factor : 0.179
ORIGINAL ARTICLE
“MONTCLAIR PAPER MILL'S EXPERIMENT WITH TARGET
COSTING” – A CASE STUDY
KISHOR NIVRUTTI JAGTAP
M.Com., M. Phil., Ph.D., M.B.A., L.L.B., D.T.L., D.L.L.&L.W., G.D.C.&A
Smt. C. K. Goyal Arts and Commerce College, Dapodi, Pune
Abstract:
Target Costing is a disciplined process for determining and realizing a total cost at which a proposed product with specified functionality must be produced to generate the desired profitability at its anticipated selling price in the future. CIMA defines target cost as “a product cost estimate derived from a competitive market price.
Target Costing is a disciplined process that uses data and information in a logical series of steps to determine and achieve a target cost for the product. In addition, the price and cost are for specified product functionality, which is determined from understanding the needs of the customer and the willingness of the customer to pay for each function. Target costing is a formal process that attempts to match a proposed product's features/benefits with a viable market price that achieves the company's profitability goals.
KEYWORDS:
Montclair Paper , organization , management , Manufacturing management .
INTRODUCTION
Target costing affects profitability of an organization depending on the commitment of management to its use, the constant involvement of cost accountant in all phases of a product's life cycle, and the type of strategy the organization follows. Target costing improves profitability in two ways. First it places a detailed continuing emphasis on product costs through out the life cycle of every product. The management team is completely aware of costing issues since it receives regular reports from the cost accounting members of all design teams. Second, it improves profitability through precise targeting of the correct prices at which the
Vol. 2 , Issue. 1 , Oct 2013
ISSN :2319-7943
Impact Factor : 0.179
ORIGINAL ARTICLE
“MONTCLAIR PAPER MILL'S EXPERIMENT WITH TARGET
COSTING” – A CASE STUDY
KISHOR NIVRUTTI JAGTAP
M.Com., M. Phil., Ph.D., M.B.A., L.L.B., D.T.L., D.L.L.&L.W., G.D.C.&A
Smt. C. K. Goyal Arts and Commerce College, Dapodi, Pune
Abstract:
Target Costing is a disciplined process for determining and realizing a total cost at which a proposed product with specified functionality must be produced to generate the desired profitability at its anticipated selling price in the future. CIMA defines target cost as “a product cost estimate derived from a competitive market price.
Target Costing is a disciplined process that uses data and information in a logical series of steps to determine and achieve a target cost for the product. In addition, the price and cost are for specified product functionality, which is determined from understanding the needs of the customer and the willingness of the customer to pay for each function. Target costing is a formal process that attempts to match a proposed product's features/benefits with a viable market price that achieves the company's profitability goals.
KEYWORDS:
Montclair Paper , organization , management , Manufacturing management .
INTRODUCTION
Target costing affects profitability of an organization depending on the commitment of management to its use, the constant involvement of cost accountant in all phases of a product's life cycle, and the type of strategy the organization follows. Target costing improves profitability in two ways. First it places a detailed continuing emphasis on product costs through out the life cycle of every product. The management team is completely aware of costing issues since it receives regular reports from the cost accounting members of all design teams. Second, it improves profitability through precise targeting of the correct prices at which the