ADMS 3510 Chapter Notes - Chapter 13: Whole-Life Cost, Value Engineering, Target Costing

• School: York University
• Department: Administrative Studies
• Course: ADMS 3510
• Professor: Roberto Umana

Document Summary

Adms 3510 ch 13 cost planning for product life cycle: target costing, theory of constraints, and. Life-cycle costing provide evaluation of profitability: sales life cycle sequence of phase in product/service"s life in market from introduction of product to market, growth in sale, maturity, decline, withdrawal. Target costing: target costing firm determines allowable cost for product/service so firm can earn desired profit, formula: target cost = competitive price desired profit, firm has 2 option for managing cost to reach target level. Illustration: target costing in health product manufacturing: sell 750 / cost-650, due to competition of 1200$ price, hpi must lower price to 600$ but maintain. Increase communication and cooperation among departments: costs of target costing, develop detailed data time demands associated with cooperation. 3- install other electronics; 4- perform final assembly; 5- pack & ship: raw material cost for each unit 300$ for hpi-2 & 750(450 for computer chip;