ACCT 102 Lecture Notes - Lecture 15: Target Costing, Profit Margin, Activity-Based Costing
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If (cid:374)ot, get rid of it a(cid:374)d save costs: process value analysis, abc, 1. If we do something in the future, how much is that going to cost us: let"s start at the (cid:373)arket a(cid:374)d k(cid:374)o(cid:449) ho(cid:449) (cid:373)u(cid:272)h (cid:449)e"re allo(cid:449)ed to pay for the product to meet profitability and price requirements. In isolation, ca aren"t good, (cid:271)ut they are good (cid:449)he(cid:374) (cid:272)o(cid:373)(cid:271)i(cid:374)ed (cid:449)ith other produ(cid:272)ts. People do(cid:374)"t shop for produ(cid:272)ts i(cid:374)depe(cid:374)de(cid:374)tly. (i. e. you go to a gro(cid:272)ery store you do(cid:374)"t just (cid:271)uy o(cid:374)e ora(cid:374)ge. You can transfer costs to the customer to help minimize this. You can introduce student accounts you talk to a teller once a month, and you pay a fee if you go over. Customers can be unprofitable now but may be profitable later. If you think about all the loyalty programs firms have, they are trying to figure out (cid:449)ho is profita(cid:271)le a(cid:374)d group you.
