Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

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Target costing involves setting a target cost for a product and designing, manufacturing, and purchasing it at that cost. This approach encourages cost reductions throughout the entire value chain, leading to company-wide cost reductions in design to cost, manufacture to cost, and purchase to cost.

Target Costing May Result in Company-Wide Cost Reductions in Design