Target Costing vs Activity Based Costing
Developers should learn target costing when working in industries like manufacturing, automotive, electronics, or consumer goods, where product cost competitiveness is critical for market success meets developers should learn activity based costing when working on financial software, enterprise resource planning (erp) systems, or analytics tools that require precise cost tracking and allocation. Here's our take.
Target Costing
Developers should learn target costing when working in industries like manufacturing, automotive, electronics, or consumer goods, where product cost competitiveness is critical for market success
Target Costing
Nice PickDevelopers should learn target costing when working in industries like manufacturing, automotive, electronics, or consumer goods, where product cost competitiveness is critical for market success
Pros
- +It is used to align engineering and design decisions with business goals, ensuring products are both technically feasible and economically viable
- +Related to: value-engineering, cost-accounting
Cons
- -Specific tradeoffs depend on your use case
Activity Based Costing
Developers should learn Activity Based Costing when working on financial software, enterprise resource planning (ERP) systems, or analytics tools that require precise cost tracking and allocation
Pros
- +It is particularly useful in industries with complex overhead structures, such as manufacturing or consulting, to optimize pricing, budgeting, and resource management
- +Related to: cost-accounting, financial-modeling
Cons
- -Specific tradeoffs depend on your use case
The Verdict
Use Target Costing if: You want it is used to align engineering and design decisions with business goals, ensuring products are both technically feasible and economically viable and can live with specific tradeoffs depend on your use case.
Use Activity Based Costing if: You prioritize it is particularly useful in industries with complex overhead structures, such as manufacturing or consulting, to optimize pricing, budgeting, and resource management over what Target Costing offers.
Developers should learn target costing when working in industries like manufacturing, automotive, electronics, or consumer goods, where product cost competitiveness is critical for market success
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