Abstract:

In an intense competitive environment, the classic cost management approaches have failed to meet the customer’s demands and expectations. Therefore, in Japan adopting a simple approach have developed the target cost management method. The purpose of target costing is to strategically manage the profit that the company will throughout the product’s lifetime by developing a product at a level that will meet the consumer’s needs and expectations. The purpose of the study is to show how the target cost method determines the resources used in production according to the product functions that reflect customer expectations and needs and to determine the practicability of the method. In this context, a company that produces hydropneumatic criko in the province of Konya has been placed in the target cost application. The findings obtained have determined the expenditure places to be controlled by the target cost index or to develop their functions. The target cost is focused on the needs and expectations of the customer, ensuring that the production resources are directed towards customer satisfaction.