The primary analysis and relevance of the standard costing system implemented in a real-life company
Contemporary organizations can use target costing for planning purposes. The price of the product is determined based on the planning procedure of the product life cycle stage. Therefore the manufacturers plan to focus on management perspective while learning proactive measures and considering cost reduction practices. The cost reduction practices are scheduled in each step while considering market driving costing, product-level target costing, and component-level target costing (Aurelian 2015). Therefore the price of the product is determined by several factors. Cost planning is an important aspect to be considered by contemporary organizations as it tends to calculate the price based on the design stage to the product life cycle stage. Planning and projecting the product price is the critical cost management aspect. Costing is all about planning and anticipating the cost of a product and determining the results in advance. Strategy planning is considered in cross-functional activities and is believed to combine the results of product life cycle stages. Product planning decisions are made that affect product success in the market. Indirect overhead and other expenses are calculated in the design stage, production stage, and marketing stage.
Conclusion
The assignment proposed the primary analysis and relevance of the standard costing system implemented in a real-life company (Faith’s country primitives). SC International implemented target costing, which is a steel company focusing on a new product. The assignment provides detail that standard costing can be applied to a current product while analyzing the market condition and the market factors that include competitors’ price and economic status of the industry. The target market was implemented on new product development. Therefore the cost of the product was determined with planned behavior and considering the design stage to final product life cycle stage. Thus, the recommendation of the standard costing system was of control focus, and the target costing system can be implemented for planning purposes, which is illustrated in the recommendation section.