Target Pricing and Cost Management

Present study considers practical methods of implementing target-costing approach to pricing policy of the state production company from Nizhny Novgorod. Target pricing is one of the tools of pricing policy of the production company based on customer’s needs and interests. This approach is likely to be a great response to the problem of controlling and reducing costs over the product life cycle because it provides cost planning and cost reduction early on the stage of developing product and control it during all production process. The study will be concerned with analyzing pricing tools and employing cost accounting method to calculate the target price and cost for one of the products of the production company from Nizhny Novgorod. Such methods as analysis, cost accounting, and value analysis will be conducted. Furthermore, results anticipating will demonstrate the competitive price and overhead cost which product includes. Finally, conclusion will present following analysis of results and propose improvement recommendations for the future strategy.