Linking target costing to ABC at a US automotive supplier

doi:N/A

eISSN: 1848-137X / ISSN: None

Journal of Cost Management

Volume 12, Issue 2 : 16-24

Research Article

Linking target costing to ABC at a US automotive supplier

Peter Horvath

Ronald Gleich

Sabine Schmidt

Univ of Stuttgart

Abstract

A pilot project was implemented at a US auto parts supplier that involved developing and implementing a target cost concept at the supplier and combining it with activity-based costing (ABC). The project was carried out on a rotary lip seal product line at one production plant. Generally, the project was a success. Target costing combined with ABC or activity-based management resulted in the most accurate calculation of target cost.

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