Target costs

In business cost accounting, target costs are those costs that result from actual employment (actual employment), valued at the planned cost rates specified in advance. The formula for a calculation in the rigid plan cost calculation is then:

${\ displaystyle K_ {s} = B_ {i} \ cdot k_ {p}}$

With

${\ displaystyle K_ {s} \! \,}$ : Target costs

${\ displaystyle B_ {i} \! \,}$ : Actual employment

${\ displaystyle k_ {p} \! \,}$ : Planned cost rate

Significance for the deviation analysis

The target costs play an important role in the analysis of deviations from actual and planned costs . A difference between the actual costs and the target costs only arises due to different cost rates. The so-called price variance can thus be separated from the quantity variance caused by differences between actual and planned employment .

Significance within flexible budgeting

The target costs result here as the sum of the fixed costs independent of the level of employment and the variable costs per cost center caused by the provision of the service . By converting the rigid plan costs to the variable current actual employment , you get the target costs incurred, which have the character of a standard. A meaningful comparison of the planned costs with the actual costs is thus achieved in order to be able to carry out a cost control, the so-called target / actual comparison .

literature

Adolf Gerhard Coenenberg : cost accounting and cost analysis , Landsberg am Lech, Verlag Moderne Industrie, 1992, ISBN 3478393906 .
Guido A. Scheld: Internal accounting in industrial companies. Planned cost accounting. With questions, tasks, answers and solutions , Volume 3, 2007, ISBN 3932647408 .