Target Costing as a Strategic Cost Management Tool and a Survey on Its Implementation in the Turkish Furniture Industry

Purpose – Target Costing is implemented in product design and development phases, and hence aims at cost reduction at the first stage of the life-cycle. This method is primarily intended to enable enterprises to seize their desired profit margin on top of the product cost and determine a price that corresponds to what customers are willing to pay. This purpose of this study is to examine the target costing method and attempts to determine the extent to which it is implemented in the Turkish furniture industry. Design/methodology/approach – This study examines the extent to which target costing is implemented at the enterprises affiliated with the Turkish Furniture Industrialists’ Association and the competencies related with the implementation principles of target costing. It therefore determines the extent to which target costing is implemented in the Turkish furniture industry. The enterprises within this study are selected from furniture industry. So Turkish Furniture Industrialists’ Association is selected because of reflecting furniture companies the best. Findings – Majority of the enterprises implementing target costing stated it helped address customer requirements and reduce costs. They will be able to utilize the method as a significant tool for competitive advantage if they follow target costing principles more diligently. Enterprises not implementing it, on the other hand, are observed to be internally following the principles of the method in general terms. Its implementation will be successful if the senior management assumes an active role for its organization-wide ownership. Discussion – The findings obtained from the study are of great importance for the enterprises which want to calculate the unit costs related to the products correctly. But, majority of the enterprises in the furniture industry are observed to be employing traditional cost management systems in setting the selling price. Enterprises should leave traditional methods behind and opt for the methods of target costing including market research to provide products at the selling price that is desired by the customers.

PDF

___

Altınbay, A. (2006). Etkin Bir Maliyet Yönetimi Olarak Hedef Maliyetleme Sistemi ve TMMT Uygulaması. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, Vol.16, 141-164.

Ansari, S. & Bell, J. (1997).Target Costing: The Next Frontier in Strategic Cost Management, Irwin Professional Publishing, Chicago.

Baharudin, N. & Jusoh, R. (2015). Target Cost Management (TCM): A Case Study of an Automotive Company. Procedia - Social and Behavioral Sciences.

Bahşi, G. & Can, V. (2001). Hedef Maliyetleme, Muhasebe ve Denetime Bakış, 4. May

Bozdemir, E. & Orhan, S. (2011). Maliyet Kontrol Aracı Olarak Hedef Maliyetleme Yönteminin Türk Otomotiv Sanayinde Uygulanabilirlik Düzeyinin İncelenmesi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 25(2), 163-179.

Can, A.V. (2004). Hedef Maliyetleme. Sakarya Kitabevi, Sakarya.

Castellano, J. F. & Young, S. (2003). Speed Splasher: An Interactive, Time-Based Target Costing Exercise. Journal Of Accounting Education, Vol: 21, 149-155.

CFI, 2019. https://corporatefinanceinstitute.com/resources/knowledge/accounting/target-costing/

Cooper, R. (1994). Japanese Cost Management Practices. CMA Magazine, 10, 20-25.

Cooper, R. & Slagmulder, R. (1997). Target Costing and Value Engineering. Portland, Oregon: Productivity Press, Oregon.

Coşkun, A. (2002-2003). Stratejik Maliyet Yönetimi Aracı Olarak Hedef Maliyetleme. Akademik Araştırmalar Dergisi, 4(15), 25-34.

Dekker, H. & Smidt, P. (2003). A Survey on The Adoption of Use of Target Costing in Dutch Firms, International Journal of Production Economics, 84, 293–305.

Dimi, O. & Simona, B. S. (2014). Target Costing–the Response of The Managerial Accounting to Changes in The Environment. Annals-Economy Series, Vol.3, 45-55.

Everaert, P.; Loosveld, S.; Tom, S. & Sarens, G. (2006). Characteristics of Target Costing: Theoretical and Field Study Perspective. Qualitative Research in Accounting & Management, 3(3).

Hacırüstemoğlu, R.; Şakrak, M. (2002). Maliyet ve Yönetim Muhasebesinde Güncel Yaklaşımlar, Türkmen Kitabevi.

Hansen, D. & Mowen, M. (1999). Cost Management: Accounting and Control. South-Western College Publishing, 554-569.

Helms, M. M.; Ettkin, L. P.; Baxter, J. T., & Gordon, M. W. (2005). Managerial Implications of Target Costing. Competitiveness Review: An International Business Journal, 15(1), 49-56.

Kalkancı, N. (2008). Hedef Maliyetleme Sisteminde Bütçe Yaklaşımı, Yöneticilerin Eğitimi ve Bir İşletmede Uygulama, Yayımlanmamış Yüksek Lisans Tezi, Gazi Üniversitesi Eğitim Bilimleri Enstitüsü, Ankara.

Kaplan, R. S.; Atkinson, A. A. (1998). Advanced Management Accounting, Third Edition,New Jersey: Prentice Hall Int,Inc.

Karcıoğlu, R. (2000). Stratejik Maliyet Yönetimi, Maliyet ve Yönetim Muhasebesinde Yeni Yaklaşımlar. Erzurum: Aktif Yayınevi.

Kato, Y. (1993). Target Costing Support Systems: Lessons from Leading Japanese Companies, Management Accounting Research, 4, 33-47.

Kaygusuz, S.Y. & Dokur, Ş. (2015). Yönetim Muhasebesi. Dora Basım Yayın Dağıtım.

Lorino, P. (1995). Target Costing Practices and Implementation. International Federation of Accountants: Articles of Merit.

Ramanan R. (2000). Target Costing. In: Swamidass P.M. (ed.) Encyclopedia of Production and Manufacturing Management. Springer, Boston.

Sakurai, M. (1989). Target costing and how to use it, Journal of Cost Management, 39-50.

Sakurai, M. (1990). Target Costing and How to use It. Emerging Practise in Cost Management, (Ed. Barry J. Brinker) Warren, Grham&Lamont Inc., Boston.

Sakurai, M. (1996). Integrated Cost Management: A Companywide Prescription for Higher Profits, Portland, Oregon, Productivity Press.

Schmelze, G.; Geiger, R. (1996). Target Costing at ITT Automotive, Management Accounting, December.

Seidenschwarz,W. (1993). Target Costing Marktorientiertes Zielkostenmanagement. München: Vahlen.

Swenson, D.; Ansari, S.; Bell, J. & Kim, I. (2003). Best Practices in Target Costing. Management Accounting Quarterly, 4, 12-17.

Tanaka, M. (1997). The Present State of Target Costing in Japanese Enterprises. Accounting, 49(8).

Taylor, T.C. (2000). Current Developments In Cost Accounting And The Dynamics Of Economic Calculation. The Quarterly Journal of Austrian Economics, 3(2), 3-19.

Yalçın, S. (2005). Müşteri Odaklı Yeni Ürün Geliştirme Aracı Olarak Hedef Maliyetleme ve Kalite Fonksiyon Yayılımının Mobilya Sektöründe Uygulanabilirliğinin Analizi, Dumlupınar Üniversitesi Doktora Tezi.

Yükçü, S. (1999). Yeni Bir Fiyatlandırma Yaklaşımı Olarak: Hedef Maliyetleme. Muhasebe Bilim Dünyası Dergisi, 1(3).