Accounting for preference dependency in target costing – a note

Artikel

Target costing is a well-established strategic cost management tool in theory and practice. The original target costing model implies independence of customer preferences resulting in additive utility functions for the customer-oriented optimization of cost structures. We argue that this independence of preferences is not given until a minimum variant of a product is reached that provides its inherent functionality. This is reasonable since one cannot assign customer utility to a product that does not function in its most basic way. Our modified model accounts for the dependency of customer preferences and differentiates between the costs necessary to produce a minimum variant and those related to product features beyond this minimum variant. The customer-oriented optimization of the cost structure is then conducted only for those costs that exceed the costs of the minimum variant. This modification justifies the preference independence assumption in target costing and allows for a more reasonable assignment of required adjustments in costs per product component.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Review of Quantitative Finance and Accounting ; ISSN: 1573-7179 ; Volume: 57 ; Year: 2021 ; Issue: 3 ; Pages: 845-858 ; New York, NY: Springer US

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Mathematical Methods ; Business Administration: General ; Accounting
• Thema: Target costing ; Customer preference independence ; Minimum variant ; Cost allocation

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Homburg, Carsten ; Hoppe, André ; Schick, Roman ; Braul, Amelie
• Ereignis: Veröffentlichung
• (wer): Springer US
• (wo): New York, NY
• (wann): 2021

Weitere Informationen

• DOI: doi:10.1007/s11156-021-00962-9
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ