PRODUCT LAUNCH

New Product Launch

New Product Launch

Executive Summary

Target costing overcomes some of the drawbacks of the current costing and performance techniques used by a technical company as it focuses on maximum allowable costs during the development phase so that the company can generate the required returns. Life-cycle costing is useful as it will incorporate high development costs and short product life in determining the feasibility of a product.

The benefits of target costing are higher if specific targets for costs and product features are established earlier in the product development cycle. Cost analysis in earlier stages of the product development may indicate whether it is feasible to produce a mobile phone that not only meet customers' expectations of price and quality but also generates the desired returns for A technical Company. Also, modifications to the product in the initial development stages cost less and will increase the company's profit and ability to compete better.

We saw then that there are two investment horizons that must be harmonized: the deadline to reach company goal and deadline for that investment mature, that is, to give the expected results. Let us return to the case of the apartment and ask the question: what kind of investment that is compatible with the period of three years? If company is lucky, the shares may rise in the next three years, but we are not in a casino. Therefore, for this term, fixed-income investments prefixed seem more appropriate.

Introduction

A technical Company produces mobile phones for sale in supermarkets. In today's competitive market of mobile phones with short product life cycles, it is important for mobile phone producers to develop and market products that not only meets the customers demand for features at a certain price level but also generate the desired profits. This essay analyses the benefits and limitations of using target costing and life-cycle costing systems over the existing costing and performance measures used by the company. The current techniques used by the company are useful for keeping costs under control but they do not provide an indication of either the maximum costs allowable for defined product features or profits over the total life of product (Reid, 2001,19).

Product Costing

Item fetching developed in an environment of extensive manufactures in the second 50% of the twentieth century as always managerial consideration was kept tabs on upgrading the creation capacity. Accepted fiscal bookkeeping methodologies have been and press on to be dependent upon estimations of equitably harsh granularity. For figuring out corporate productivity, it is sufficient for the most part to track crude materials, work, tooling, and vigor inputs and to total these into generation fetches. Evaluating of diverse items, obviously, required finer qualifications so expenses connected with classes of items might be accessible as a premise for differential estimating (Shin, 2011). Closer thoughtfulness regarding the expenses of, case in point, low-, medium-, and high-close models of a vehicle or an apparatus then mushroomed "descending" (Browning, 2007, 217-240).

Target costing

Target costing is a method to determine the cost at which a ...