Target Costing and Profit Management Process Flow

This process flow sample provides steps for completing the target costing and profit management process at an automotive company. The major areas include the long-term general plan, basic product plan and detailed development plan.

Some of the sample steps include: determine the companywide ratio of profit to target sales; determine the companywide target sales per term; determine the companywide profit per term; determine target sales, target profit, and plant investment framework for each car model; create a long-term profit planning chart and long-term fund planning chart; and determine the corporate new product development plan.

This document should be used as a general guide to understand and review this business process. Organizations should customize this tool to ensure that it reflects their business operations and continuously monitor the process to ensure that the steps described are accurate.