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Case 10-3 Target Costing Nebraska Toaster Company

Case 10-3 Target Costing Nebraska Toaster Company. Aftab Usmani Alex Derevin Carla Daniels Shantanu Singh. Case Details. Wants to introduce new product : A Toaster Oven Want to match the price on basic toaster Market price : $20 Wants to earn profit of 20% on sales price

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Case 10-3 Target Costing Nebraska Toaster Company

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  1. Case 10-3 Target CostingNebraska Toaster Company Aftab Usmani Alex Derevin Carla Daniels Shantanu Singh

  2. Case Details • Wants to introduce new product : A Toaster Oven • Want to match the price on basic toaster • Market price : $20 • Wants to earn profit of 20% on sales price • Customer requirements are identified • Toasts properly • Size • Speed of toasting • Toaster capacity • Appearance • Easy to clean

  3. Target Cost Target Cost =Sales Price - 0.2* Sales Price Target Cost = (1-0.2)* $20= $16

  4. Value Chain AnalysisToaster Oven

  5. Functional Cost Analysis

  6. Requirement Analysis

  7. Functional Performance Analysis (Percentage)

  8. Functional Performance Analysis(Importance Index)

  9. Rank of Product Function

  10. Target Cost Index

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