SISTEM MANAJEMEN BIAYA 2020

TARGET COSTING
TOTAL LIFE CYCLE COSTING
STAGE OF LIFE CYCLE BY TYPE OF PRODUCT
 TARGET COSTING

Market research under target

costing is not a single event.
The product engineers attempt to
design costs out of the product
before design and development
ends and manufacturing begins.
Target costing uses the total-life-
cycle concept by adopting the
perspective of minimizing the cost
of ownership of a product over its
useful life

Audora Art Gallery | 2020

3 differences characterize the target costing process
Value Engineering Process
examines the design of each component to determine whether it is possible to reduce costs while
maintaining functionality and performance

Cross-functional Product Teams

Individuals representing the entire value chain—both inside and outside the organization

Supply Chain Management

Develops cooperative, mutually beneficial, long-term relationships
between buyers and suppliers

Audora Art Gallery | 2020

 Target Costing
COST ANALYSIS

Develop a list of Perform a Determine the Relating features Develop relative

product functional cost relative importance to functions functional
components breakdown of customers’ rankings
and functions requirements

Art Gallery | 2020

DEVELOP A LIST OF PRODUCT COMPONENTS AND FUNCTIONS
PERFORM A FUNCTIONAL COST BREAKDOWN
RELATING FEATURES TO FUNCTIONS
DEVELOP RELATIVE FUNCTIONAL RANKINGS
Value Engineering

Identify components
for cost reduction.
Choosing which components to
select requires computing a value
index.
Value Engineering
Generate cost
reduction and
function
enhancement ideas
Engineers engage in
creative thinking and
brainstorming to identify what can
be reduced, eliminated, combined,
substituted, rearranged, or
enhanced to provide the same or
higher level of functionality from a
component at less cost
 concerns
ON TARGET COSTING

1 2 3 4
Lack of Poor Employee burnout Overly long
understanding of implementation of development time
the target costing the teamwork
concept concept

Audora Art Gallery | 2020

thank you