TOYOTA CORPORATION

Concept cars are an expression of dreams, emotion and inspiration - and a vision of how to progress reality. They allow us to show the world how our designers and engineers are constantly probing the boundaries of their imagination and their creativity. (Annual Report, 2009)

Toyota design centres in California, Japan and southern France all strive to develop concepts that express our commitment to the future. The best ideas are strongly supported with investment to ensure that such dedication to creativity is eventually realised in the production models you are able to buy at your local dealership.

Prosess costing of toyota

When Toyota estimates the approximate costs of a new model it does not simply add up all the costs of the upgraded model, but instead it sums the cost variations of the new model and the old one. Toyota finds this technique to be very beneficial, because it tends to be less work and provides more accurate results. In addition it helps the specific divisions comprehend the cost fluctuations. By using this technique Toyota removes variable costs both models incur, such as wages and indirect costs, and then they can base their decisions only on costs that change between the two models in relation to design and production volume. (Ohno, 2009)



Promoting Cost Planning

“The purpose of cost planning is to determine the amount by which costs can be reduced through better design of the new model.”  Cost reduction targets are not rationed off to the appropriate divisions by using a standard percentage to spread the reduction evenly over the entire process, but instead the reduction is efficiently passed to each division based on their capability.  This capability is determined by the cost manager meeting with each division manager to agree on an appropriate cost reduction for that specific division, and then it is the responsibility of each division to carryout those reductions their own way.

Conclusion

The main point in this article is to show how cost planning at Toyota is focused on the design phase. Toyota does this by setting goals for cost reductions through design changes solely, excluding all other factors. Toyota takes these goals and then assesses them to different divisions, to make the necessary changes. Toyota believes that by changing product design and production design to produce lower priced and more efficient products, they will achieve a higher level of profitability.

Income Statement

Toyota Motor Corp

 

 

 

 

 

As Reported Annual Income Statement

3/31/2009

3/31/2008

Currency

JPY

JPY

Auditor Status

Not Qualified

Not Qualified

Consolidated

Yes

Yes

Scale

Millions

Millions

 

 

 

Income on merchandise sales

19,173,720

24,820,510

Finance income

1,355,850

1,468,730

Net sales

20,529,570

26,289,240

Cost of sales

17,468,416

20,452,338

Cost of finance

987,384

1,068,015

Total selling, general & administrative expenses

2,534,781

2,498,512

Cost of sales & administrative expenses

20,990,581

24,018,865

Operating income (loss)

-461,011

2,270,375

Total interest & dividend income

138,467

165,676

Interest expense

46,882

46,113

Gain on translation of foreign currencies

-1,815

9,172

Other non-operating income

-189,140

38,112

Other income & expenses

-99,370

166,847

Income (loss) before income taxes

-560,381

2,437,222

Current income taxes

-56,442

911,495

Income (loss) before minority interests

-503,939

1,525,727

Minority interests

-24,278

77,962

Equity earnings

42,724

270,114

Net income (loss)

-436,937

1,717,879

Average number of shares outstanding-basic

3,140.42

3,177.45

Average number of shares outstanding-diluted

3,140.42

3,178.66

Number of shares outstanding

3,096.80

3,109.20

Net income (loss) per share-basic

-139.13

540.65

Net income (loss) per share-diluted

-139.13

540.44

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