Applying Target Costing to the Service Sector: Sunline Auto Insurance Case

Wakefield, James A.; Thambar, Paul J.

doi:10.2308/iace-52427

Cited by 5 publications

(2 citation statements)

References 6 publications

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“…This evolution has made the concept of quality applicable to all kinds of organizations, including those belonging to service industries such as education, non-profit/government and healthcare (Sedevich-Fons, 2014). As a consequence, target costing has also been adapted to this wider notion of quality and, as a result, made applicable in the service sector (Wakefield and Thambar, 2019; Aladwan et al. , 2018) and, more specifically, in the healthcare industry (CIMA NHS Working Group, 2005).…”

Section: Theoretical Compatibility Between Bundled Payments and Targe...mentioning

confidence: 99%

Quality and costs in health care: using target costing in support of bundled payment programs

Sedevich‐Fons¹

2022

TQM

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PurposeThe main purpose of this study is to provide healthcare institutions with a management accounting framework that helps them achieve their quality goals and cost targets when providing services under bundled payment schemes.Design/methodology/approachAfter providing a theoretical framework on both bundled payments and target costing, the success factors of the former are compared with the principles of the latter in order to analyze the compatibility and complementarity of these models. Afterwards, an example of their potential combination in practice is introduced and ideas for future research are suggested.FindingsIt is concluded that, apart from presenting similar underlying goals as regards quality and cost, bundled payments and target costing display elements in common that make them compatible from a theoretical standpoint.Originality/valueBecause bundled payments models are relatively new, studies on their compatibility with managerial techniques emerging from industries other than healthcare do not abound in the literature.

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Section: Theoretical Compatibility Between Bundled Payments and Targe...mentioning

confidence: 99%

Quality and costs in health care: using target costing in support of bundled payment programs

Sedevich‐Fons¹

2022

TQM

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“…Additionally, it results in customer happiness, allowing businesses to maximize earnings and sales. Studying the market and the dynamics of its forces resulted in the establishment of this system (Almasria, 2018;Wakefield, 2019;). Two significant truths concerning expenses and marketing have been discovered as a result of target costing (Al-hosban et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

Masadeh¹,

Jrairah²,

Almasria³

2023

J. Professional Business Review

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Purpose: This study aimed to examine the effect of applying the target cost approach on product structure in industrial public shareholding companies in Jordan. Theoretical framework: The purpose of applying target cost approach on products' structure (products pricing, development and quality) and it is ability to reduce costs and improvements that can be obtained in the process of applying target cost approach. Numerous research related to applying target cost approach have been conducted, with the majority focusing on large companies. However, Jordanian industrial companies have limitations compared to large companies. Repairability is considered for cost optimization. Design/methodology/approach: The study uses the analytical approach through the study tool (Questionnaire). The study population consisted of Jordanian industrial companies, which reached (56) companies in 2022, according to the monthly statistical periodical of the Amman Stock Exchange (ASE). A sample of (42) companies was selected, and the questionnaire was distributed to (The Financial Manager, Production Manager, Sales Manager, and Accountant) for each company. The number of questionnaires approved for statistical analysis was (130), representing (77%) of the distributed questionnaires. This study uses different tests to analyze the data and extract results related to the statistical methods, i.e., the descriptive statistic, Cronbach's Alpha Equation, Pearson's Correlation Coefficient, and Simple Linear Regression Analysis. Findings: The study found that there is a strong relationship between the target cost approach and the product structure, with the existence of a statistically-significant effect, whereas the correlation coefficient value reached (0.808); thus, the target cost approach contributes to developing products and improving profitability through focusing on the analysis process of the possibilities of product success, before allocating the productive resources thereof. It has also contributed to reducing the cost during the production stages from its beginning while maintaining the products' quality, and it also leads to increasing sales volume through the pricing mechanism based on the target cost. Through the answers of the study sample individuals, it is pointed out that the arithmetic mean of the target cost approach is high, as it reached (3.77) and the standard deviation is (0.57), as well as the arithmetic means of the products' structure is high, as the pricing element came in the first class, with arithmetic means of (3.86) and standard deviation of (0.51), then the development element came in the second class, with arithmetic means of (3.78) and standard deviation of (0.58), whereas the quality element came in the third-class, with arithmetic means of (3.75) and standard deviation of (0.53). The results of the regression analysis also indicate that there is a statistically significant effect of the target cost approach on the quality of products, with (R²) (46.3%) which represents the proportion of explanation in the variance of the dependent variable. The findings of the study highlighted that there is a statistically-significant effect of the target cost approach in product development with (R²) with (37.5%) which indicates that the target cost explains (37.5%) of the difference in the product development. The results also indicate that there is a statistically significant effect of the target cost approach in product pricing with R) value indicating a high-strength correlation between the target cost approach and product pricing, which is (0.812). Research Practical implications: It is necessary to pay attention to qualifying workers by developing programs that deal profoundly with the approachs and modern systems of costs, such as the target cost system and the value chain as these approachs and accounting systems will be intensively adopted in the future for their outstanding role in developing product performance, Pricing and improving its quality. Originality/value: The study recommended that it is necessary to develop successful products and price them based on the target cost by balancing the company's ability and customers' needs, as well as using methods that lead to consistency and harmony between products' quality and customers' expectations. The study also recommended focusing on qualifying workers by developing programs that profoundly tackle the approaches and modern systems of costs, such as the target costing system

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A Structured Review of Research‐Informed Instructional Strategies to Support CPA Enabling Competencies in Future Accountants*

Siddiqui

2024

Accounting Perspectives

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CPA enabling competencies underpin the human skills and professional values that all future accountants should possess. Nevertheless, to date, the discourse is limited within the scholarship of teaching and learning (SoTL) on how to best inculcate these competencies in future accountants. This study attempts to spark such a discourse by conducting a structured literature review (SLR) of the research‐informed instructional strategies to foster CPA enabling competencies, skills, and values in future accountants, and outlines future research opportunities. The findings indicate that the CPA competency “acting ethically and demonstrating professional values” can be engrained in future accountants using business cases and targeted courses/lessons in accounting classrooms. “Leading” is best taught through targeted courses/lessons. “Collaboration” can be gained through team‐based learning (group work) and software. “Managing self and others” can be engrained through a strategic course setup. “Adding value” can be achieved by experiential learning. “Solving problems” can be facilitated through in‐class activities that specifically target critical thinking skills. Finally, “communication” is facilitated with writing tasks and software. The top five research‐informed teaching tools that advance CPA enabling competencies are collegial tools (i.e., group work, peer review, and writing prompts), software, business cases, experiential tools, and targeted courses/lessons. In the future, an in‐depth SLR should be conducted on each of the five research‐informed teaching tools for their integration within accounting classrooms.This article is protected by copyright. All rights reserved.

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Applying Target Costing to the Service Sector: Sunline Auto Insurance Case

Cited by 5 publications

References 6 publications

Quality and costs in health care: using target costing in support of bundled payment programs

Quality and costs in health care: using target costing in support of bundled payment programs

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

A Structured Review of Research‐Informed Instructional Strategies to Support CPA Enabling Competencies in Future Accountants*

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