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innovation and new product strategy
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Target costing

Target costing is a pricing method used by firms. It is defined as ""a cost management tool for reducing the overall cost of a product over its entire life-cycle with the help of production, engineering, research and design"". A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required profit margin from that product at a particular selling price.In the traditional cost-plus pricing method, materials, labor and overhead costs are measured and a desired profit is added to determine the selling price.
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