Target Costing Case Analysis


Target Costing Case Analysis
Select TWO of the eight questions listed and provide detailed answers to each after reviewing a case analysis. Login information will be provided for

the textbook.

The Module 3 Discussion will ask you to complete a case analysis from Chapter Eight of the course text (Atkinson et al.). Once you have completed the

readings and viewed the associated videos, you will participate in and complete the case study analysis.

Begin by turning to page 335 of the course text, and carefully read the Target Costing Mercedes-Benz All-Activity Vehicle (AAV) case. The case begins

on page 335 and ends on page 339 of the course text.

At the end of the case, you will find eight questions available to answer (lettered a – h). For your convenience, each of the questions is provided


(a) What is the competitive environment faced by MB as it considers launching the AAV?

(b) How has MB reacted to the changing world for luxury automobiles?

(c) Using Cooper’s cost, quality, and functionality chart, discuss the factors on which MB would have to compete with other automobile producers, such

as Jeep, Ford and GM.

(d) How does the AAV project link with MB’s strategy in terms of market coverage?

(e) Explain the process of developing an importance index for a function group or component. How can such an index guide managers in making cost

reduction decisions?

(f) How does MB approach cost reduction to achieve target costs?

(g) How do suppliers factor into the target costing process? Why are they so critically important to the success of the MB AAV?

(h) What role does the accounting department play in the target costing process?


Your discussion assignment is to select TWO of the eight questions and provide detailed answers to each. The goal is for each of you to select a

different set of questions than your classmates, so that all questions have multiple answers and perspectives. To that end, you won’t be able to view

classmates’ posts until your own response has published. For each question you select, you should compose a 100-300 word response, and include at least

two references (one of which may be the textbook).

Your total posting should be between 300 – 400 words. You may use sources to answer more than one question. Cite sources and references using APA

format (a tutorial is provided in the Class Tutorials Section of the course). Be sure to include a copy of the question you answer, so as to reduce

confusion when classmates review your postings.