A high proportion of production costs is committed during the development and design stage of new products. The effects of product development decisions on other parts of the firm's value chain are now widely acknowledged. This recognition has produced a demand for more sophisticated cost management procedures relating to new product development procedures such as target costing and activity-based management Tarover get costing the encourages managers to assess the overall cost of product designs product's life cycle and simultaneously provides incentives to make design changes to reduce costs. Activity-based management identifies the activities produced at each stage of the development process and a their costs. Activity-based management is complimentary to target costing because it enables managers to identify the activities that do not add value and then eliminate them so that overall life cycle costs can be reduced