Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


Target cost, activity-based costing systems



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12.18 Target cost, activity-based costing systems.
(50–60 min)
1
A target cost per unit is the estimated long-run cost per unit of a product (or service) that, when sold at the target price, enables the company to achieve the target operating income per unit. A target cost per unit is the estimated unit long-run cost of a product that will enable a company to enter or to remain in the market and compete profitably against its competitors.


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
2
The following table presents the manufacturing cost per unit for different cost categories for PREV and PREV

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