Together applicability of kaizen costing and target costing as strategic cost management approaches and a case study

Changes that occur today affect businesses and their settings multidimensionally. Increased global competition and technological transformations have brought forward the need to adopt new business management approaches that primarily consider the insufficiency of inward thinking and take business surrounding into account as well.Besides the value increase of information, obtaining and using it also crucial for businesses. Moreover, further to the information acquired from business settings, formation and structuring of information within businesses themselves are more important for businesses. Because businesses will have to change their management methods and understandings, renew its inner structure and will have to adopt itself to the market in order to survive in deadly competition environment.Intensified competition and factors that bring forward customer satisfaction such as low price (cost), high quality and more range of goods and services have changed the nature of accounting as book keeping into a new tool that guide and help businesses forecast their future strategies and plans and more importantly a tool that is sensitive to future needs of management. From a different point, changing business settings have led to the decrease of profit margins of businesses and increased the importance of direct goods costing and cost controlling in management decisions. Cost accounting systems have become inefficient in providing necessary information that the management demanded. At this point a new cost management approach suitable to today?s developed production and global competition environment have come into existence that responds to the new production approach and provide information that is more comprehensible than traditional cost accounting information and create more value by causing less cost. This approach pioneered strategic cost management approach by taking into consideration the idea to have business strategy in the forefront.Among others, target costing that refers to decrease of production costs starting from the planning of design a product systematically and Kaizen Costing that refers to decreasing of product costs during production process by minor, frequent steps and slowly in time are known as strategic cost management approaches. Taken together, these two techniques form the basis of a total cost management system that controls costs by product life cycle.In the study, first target costing and Kaizen costing methods and the relationship between them have theoretically been examined. Later, towards the applicability of these two methods together, an implementation of these two methods that was conducted in Dardanos Social Facilities of Çanakkale Onsekiz Mart University has been given.