Application of target costing method in a manufacturing company

With the continuous advancement of technology, customer needs and demands are also changing proportionally. Businesses must adapt to this change. During this adaptation process, changes also occur in the costs of businesses. As companies keep up with the changes in customers and technology, they should also adjust their cost management calculations accordingly. This is because with the development of technology, old methods and calculations may not meet the needs of the business and incorrect calculations can place the business in an unfavorable position within the competitive environment. In this study, an application was conducted using the target costing method, which is one of the approaches of strategic cost management, with the data of an apricot company operating in Malatya province. As a result of the study, the target cost index of drying and packaging elements for a mature apricot was calculated, and inferences were made based on whether this index was greater than or less than 1. It has been observed that companies can reduce costs and gain a competitive advantage by using the target costing method. Moreover, it is expected that the profitability of firms will increase as more accurate decisions can be made regarding the pricing of products. Therefore, this study demonstrates that the Target Costing method is an important cost management tool for businesses.