Target Costing

Target Costing

Increase profit margins with target cost analysis

How high can the product costs be in order to market the product successfully?

How much will your customer pay? In the context of development or reengineering, target costing (= target cost analysis) must be geared to a marketable target price determined from the outset, as well as the corresponding customer requirements. Ultimately, the goal is to calculate the target costs of the product in such a way that businesses achieve an optimal profit margin.

For this purpose, Cost Control calculates the target costs required for your product as part of a value analysis. In order to do this, the value of a component – for example from a machine or plant – is precisely analyzed in order to balance the price and the functionality (= customer benefit). With this target cost analysis, your products can be developed for the market at the desired target price with an optimal profit margin (=Design to Cost).