Abstract
Target Costing has evolved from early cost reduction techniques found in the beginning of the twentieth century at Ford in the US and in the development of the Volkswagen Beetle in Germany in the 1930s (Rösler 1996). Yet, the development of a full-fledged Target Costing approach has its origin in a time period of scarce resources, post-World War II. During this time, Americans created a concept of maximizing the number of product attributes while minimizing product costs (Leahy 1998a). This technique became known as ‘value engineering’ and was subsequently adopted by Japanese companies in order to withstand the stiff competition within Japan. In the 1960s, Japanese companies combined the value engineering concept with the practice of influencing and reducing product costs, sometimes as early as the planning and development stage, all in an effort to develop an effective way of managing cost (Buggert and Wielpütz 1995).
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© 2011 Il-woon Kim and Emily Berry
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Kim, Iw., Berry, E. (2011). Target Costing. In: Abdel-Kader, M.G. (eds) Review of Management Accounting Research. Palgrave Macmillan, London. https://doi.org/10.1057/9780230353275_11
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DOI: https://doi.org/10.1057/9780230353275_11
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