Implementing Target Costs Method in Romanian Higher Education Institutions

Keywords: Target Cost Method , higher education , value engineering , life cycle of a product or a service , cost management , managerial accounting , competitive environment , value chain


  • Liliana Paschia, Affiliation: "1 Decembrie 1918" University of Alba Iulia, and Hyperion University of Bucharest, Romania.
Pages:  21 : 28

Target Cost Method (TC) is us ing price and profit concepts. That is the reason it may be wrong consider as a technique for product or service price calculation. Actually, it is a cost management method which differentiates product technologies or processes that generate an acceptable profit to a certain activity level. Target Cost Method could be considering as an aggressive one. It makes possible to identify unprofitable operational activities of the economic entities as well as inefficient processes that are otherwise hidden within the use of traditional methods of managerial accounting. As a result of TC application there is a significant difference between initial costs and the target costs. This is natural situation considering the target costs are established in the design phase of product or service. We are going to prove this issue in the context of the Romanian higher education system.

JEL classification:  I23, M41