Case 103 Target Costing Nebraska Toaster Company

1
Case 10-3 Target CostingNebraska Toaster Company

• Aftab Usmani
• Alex Derevin
• Carla Daniels
• Shantanu Singh

2
Case Details

• Wants to introduce new product A Toaster Oven
• Want to match the price on basic toaster
• Market price 20
• Wants to earn profit of 20 on sales price
• Customer requirements are identified
• Toasts properly
• Size
• Speed of toasting
• Toaster capacity
• Appearance
• Easy to clean

3
Target Cost

• Target Cost Sales Price - 0.2 Sales Price
• Target Cost (1-0.2) 20 16

4
Value Chain AnalysisToaster Oven
5
Functional Cost Analysis
6
Requirement Analysis
7
Functional Performance Analysis (Percentage)
8
Functional Performance Analysis(Importance Index)
9
Rank of Product Function
10
Target Cost Index
11
Functional Performance Analysis(Requirement
Score)
12
Rank of Product Function