The purpose of this study is to make a number of critical observations about the impact on car manufacturing of using target costing as a base for new car pricing. Since the financial systems in a firm can have a major impact on a manufacturer's ability to develop and maintain an effective competitive edge, the aim of target costing is to give car manufacturers the ability to measure and assess their performance accurately in relation to major competitors. The study objectives, therefore, were to:
- develop propositions about cost concepts; and
- examine the available evidence in support of the propositions.