Definitions for "Target Costing"
A target cost is calculated by subtracting the desired profit margin from an estimated or market-based price to arrive at a desired production, engineering, or marketing cost. This may not be the initial production cost, but one expected to be achieved during the mature production stage. Target costing is a method used in the analysis of product design that involves estimated a target cost, then designing the product/service to meet that cost.
is a disciplined process for determining and realizing a total cost at which a proposed product with specified functionality must be produced to generate the desired profitability at its anticipated selling price in the future.
A method or establishing a cost objective for a product or service during the design phase. The target cost is determined by the following formula: Sales price - Target Profit = Target Cost
Keywords:  theory, transaction
Theory X Transaction