Question 1:

Read Chapter 11: Target Costing (A5) in the following book:

Review of Management Accounting Research, edited by Magdy G. Abdel-Kader (Palgrave Macmillan, 2011), pp. 275-294

Summarize the article from page (275-294) with your own words in one page. Do not cut and paste from the book.

Question 2:

Watch this video and briefly answer four questions based on the video presentation. You may want to read these questions (and print them) before you start watching the video tape because you will find all the answers during the presentation.

CPA - Strategic MA - W2 - Pricing and Target Costing

Pricing and Target Costing by Dr Neale O'Connor (40 minutes)

Q1. Discuss the differences in short-term pricing and long-term pricing.
Q2. Why is the distinction important with respect to the scope of relevant costs.
Q3. In discussing five steps of TC, it is stated that Steps 1 and 5 are most important. Explain why.
Q4. In the last part of lecture, an example is presented on how to reduce its cost to target cost $720. List specific ways to do so as listed in the example.

Question 3:

This video presents a very short example of computerized Cost Table which is being used in TC process. Based on this example, describe Cost Table briefly.

Launch New Products at or Below Target Cost with aPriori (8 minutes)