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Target costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Target costing

  • This topic has 4 replies, 2 voices, and was last updated 2 months ago by Sharonlee.
Viewing 5 posts - 1 through 5 (of 5 total)
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    Posts
  • April 26, 2025 at 4:11 am #716980
    Sharonlee
    Participant
    • Topics: 4
    • Replies: 7
    • ☆

    In target cost we establish, does it involve design cost like R&D or just the cost of manufacturing and selling it per unit of product?

    April 26, 2025 at 7:02 am #716983
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1516
    • ☆☆☆☆☆

    Yes, both design costs (r&d) and manufacturing are considered.

    This means controlling costs from the design stage to ensure that the total cost per unit, including design and manufacturing, meets the target cost.

    April 26, 2025 at 8:51 am #716988
    Sharonlee
    Participant
    • Topics: 4
    • Replies: 7
    • ☆

    Isn’t that design cost more likely to be included as part of the costing in life cycle costing?

    April 26, 2025 at 2:35 pm #716998
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1516
    • ☆☆☆☆☆

    That’s a different topic
    And yes design cost would be more likely in a lifecycle question.
    But that wasn’t what you asked

    April 29, 2025 at 1:23 am #717044
    Sharonlee
    Participant
    • Topics: 4
    • Replies: 7
    • ☆

    I’m just trying to relate the topic. As I thought design cost will be part of R&D cost and R&D is usually treated as period cost. So, special thing about target costing is it considers design cost also? Thank you so much for your clarification!

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