Bibliography On Target Costing Thematics Accounting Essay


Introduction: Write a paragraph explaining the scope of your investigation and providing a rationale for your selection of articles.

It is considered that after having passed the stage of product development and having calculated its cost the product is placed at market at a price that covers production costs and ensuring a sufficient level of profit. In fact, often things are moving in the opposite order. Typically, companies already know what price level they can expect, and the problem is in development of a product, the cost of which would provide the required level of profitability in the current context. As one can see, the issue of cost always remains central. Therefore, companies are trying to get the desired result using target costing.

The analyzed articles are considered to raise up-to-date issues of target costing in the conditions of contemporary technological and scientific development, because the main problem is that usually it goes about implementing target costing at enterprises which have for decades applied the work within the traditional approaches to cost of the goods being developed and already running in production. So, when upgrading the cost accounting system it is necessary to undergo a certain sequence of steps.

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The current research tends to cover the actuality of applying target costing in concrete spheres of economy, in specific economic processes, as well as the technical basis for target costing introduction into these processes.


A. Full reference details for article (using Harvard referencing style).

'Target costing in the NHS: Reforming the NHS from within' 2005, CIMA, October, pp. 1-14.

B. Brief summary of content.

The article considers the possibility to apply the target costing approach in the NHS, which currently faces serious challenges having to show optimal financial management, in particular, to improve the services costs management.

The authors describe the basic steps in target costing, which are the setting of targets for price, volume and profit allowing establishing the needed production cost. Cost analysis helps to reveal a real cost, detect the extent of the cost reduction, and develop plans to achieve the target cost.

The article covers of the following issues: background to target costing, the target costing process, advantages of target costing, key characteristics of successful target costing, target costing in process and service businesses, costing in the healthcare system, and target costing in the NHS.

C. Short analysis or evaluation.

We share authors' opinion that though target costing is sometimes considered too bureaucratic and time-consuming, large complex companies still need a detailed system to smooth the progress of internal and external interaction. The authors use persuasive arguments to prove that target costing can give such a possibility; and thus, it might be suitable and advantageous to apply it for particular services within whole sphere of socio-economic life.

On the other hand, target costing is an approach which has to take into account the whole supply chain, or in case of the health service, the whole local health economy, which is rather difficult. Nevertheless, case studies described in the article show that in the US hospitals which applied similar management strategies staff started working more effective over solving problems and made significant improvements.

The article is also deeply analytical in presenting target costing as a framework for using other approaches, like activity-based costing and total quality management. In general the article might be useful to deepen the understanding of applying target costing in different industries and organizations.


A. Full reference details for article (using Harvard referencing style).

Dal-Ri, F, Alonso, J & Duarte, C 2005, 'Modeling the Subjectivity in the Target Costing Process: An Experimental Approach Based on the Fuzzy Logic Concepts', The International Journal of Digital Accounting Research, vol. 5, no. 10, pp. 203-222.

B. Brief summary of content.

The authors of the article state that target costing process is subjective by nature because most of the used information is inexact and vague. Therefore, the paper intended to offer a technique based on the fuzzy logic conceptions to take into consideration the ambiguity and subjectivity the target costing is characteristic of.

The article describes some problems met in the target costing in Section 2; considers the fuzzy logic conceptions and analyses some relevant works in the sphere in Section 3; Section 4 presents the structure of the offered model. The authors explain the fuzzy conceptions on the example of the tennis racquet production.

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The paper demonstrates that fuzzy logic gives an opportunity to better understand the interaction between costs elements and products. The authors emphasize that fuzzy logic is being used in the designing of expert systems technology via the initiation of representational and illustrative techniques.

C. Short analysis or evaluation.

In our opinion, the authors are rather constructive in proving that fuzzy logic can be effectively applied in finance, auditing, accounting, and business because these areas often have ambiguous and vague details that are not taken into accounts in the traditional pattern built on binary logic.

Although the article does not provide the best solution for the decision maker, it shows an alternative to traditional techniques based on binary logic. It demonstrates how fuzzy logic can be applied to deal with the subjectivity in the complicated process of company's decision making by giving possibility to pattern the human decision development.

An important point is that although the methodology provided by the article described the model with only three products such a fuzzy model can be utilized to more complicated cost process as well, containing great number of products, prices, and costs. The authors plan to demonstrate this in their further researches.


A. Full reference details for article (using Harvard referencing style).

Helms, MM, Ettkin, LP, Baxter JT & Gordon, MW 2005, 'Managerial implications of Target Costing', Competitiveness Review, vol. 15, no. 1, pp. 49-56.

B. Brief summary of content.

The authors describe the "backward" nature of target costing approach which starts with a product's targeted price, considering both the preferable current price and the further life cycle price model. They describe the significant managerial propositions of this method and provide implementation plans. From the position of the authors, the problem for producers is to offer the lowest prices keeping the highest quality. Target costing can help to minimize costs by the optimal utilization of resources within the whole supply chain.

The article is rich in examples of companies successfully applying target costing. It discusses the current arguments about the areas where the approach can be best used. The article can be useful in understanding the international differences of the approach and the problems of global outsourcing within the supply chain. In the conclusion the authors list the difficulties of implementation, explain the importance of target costing, and propose issues for further research.

C. Short analysis or evaluation.

This article applies both value-based and price-based approaches towards cost, as well as activity-based target costing management. The authors are convictive in arguing that though target costing is much more efficient than traditional approaches, producer can be sure that the prices will correspond to public expectations. At the same time, their examples illustrate that much time is still to be sent on bringing the costs to adequate levels throughout the supply chain. The article is useful for understanding the processes of coordination and involvement of accounting professionals in target costing implementation.

The authors suggest analyzing the companies that have adopted target costing, and further express the need to arrange the data of the analysis in the form of textbooks for specialists in different areas of management. This may help managers to detect implementation difficulties and overcome them.