Applying target costing to the service sector

Sunline Auto Insurance case

James Wakefield, Paul Thambar

Research output: Contribution to journalArticleResearchpeer-review

Abstract

The application of target costing in a service firm is rarely taught in managerial accounting courses, in contrast to the focus on manufacturing-related cost topics (e.g., Everaert & Swenson, 2014). Educating future managers in the use of service-sector target costing is important because it provides knowledge on how profitability can be improved through a considered approach to cost management. The case study objectives are to improve students' ability to analyze and explain important areas of cost, assess and apply target costing, and strategically consider costs. Our testing indicates support for case efficacy in the context of these objectives. The case refers to an auto insurance firm to illustrate how target costing can be applied in the service sector. Students are provided with information on cost data and the target costing technique, allowing them to assess costs, apply the target costing techniques, and develop strategic cost management focus and recommendations.
Original languageEnglish
Number of pages47
JournalIssues in Accounting Education
DOIs
Publication statusAccepted/In press - 2019

Keywords

  • strategic cost management
  • target costing
  • service firm costing

Cite this

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abstract = "The application of target costing in a service firm is rarely taught in managerial accounting courses, in contrast to the focus on manufacturing-related cost topics (e.g., Everaert & Swenson, 2014). Educating future managers in the use of service-sector target costing is important because it provides knowledge on how profitability can be improved through a considered approach to cost management. The case study objectives are to improve students' ability to analyze and explain important areas of cost, assess and apply target costing, and strategically consider costs. Our testing indicates support for case efficacy in the context of these objectives. The case refers to an auto insurance firm to illustrate how target costing can be applied in the service sector. Students are provided with information on cost data and the target costing technique, allowing them to assess costs, apply the target costing techniques, and develop strategic cost management focus and recommendations.",
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Applying target costing to the service sector : Sunline Auto Insurance case. / Wakefield, James; Thambar, Paul.

In: Issues in Accounting Education, 2019.

Research output: Contribution to journalArticleResearchpeer-review

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T1 - Applying target costing to the service sector

T2 - Sunline Auto Insurance case

AU - Wakefield, James

AU - Thambar, Paul

PY - 2019

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N2 - The application of target costing in a service firm is rarely taught in managerial accounting courses, in contrast to the focus on manufacturing-related cost topics (e.g., Everaert & Swenson, 2014). Educating future managers in the use of service-sector target costing is important because it provides knowledge on how profitability can be improved through a considered approach to cost management. The case study objectives are to improve students' ability to analyze and explain important areas of cost, assess and apply target costing, and strategically consider costs. Our testing indicates support for case efficacy in the context of these objectives. The case refers to an auto insurance firm to illustrate how target costing can be applied in the service sector. Students are provided with information on cost data and the target costing technique, allowing them to assess costs, apply the target costing techniques, and develop strategic cost management focus and recommendations.

AB - The application of target costing in a service firm is rarely taught in managerial accounting courses, in contrast to the focus on manufacturing-related cost topics (e.g., Everaert & Swenson, 2014). Educating future managers in the use of service-sector target costing is important because it provides knowledge on how profitability can be improved through a considered approach to cost management. The case study objectives are to improve students' ability to analyze and explain important areas of cost, assess and apply target costing, and strategically consider costs. Our testing indicates support for case efficacy in the context of these objectives. The case refers to an auto insurance firm to illustrate how target costing can be applied in the service sector. Students are provided with information on cost data and the target costing technique, allowing them to assess costs, apply the target costing techniques, and develop strategic cost management focus and recommendations.

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DO - 10.2308/iace-52427

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JO - Issues in Accounting Education

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