Target costing calculations Amajor car manufacturer developed the following information as part of its target costing efforts:
|
Customer Importance Rating by Category |
|
|
CATEGORY |
IMPORTANCE |
|
Safety |
140 |
|
Comfort and convenience |
120 |
|
Economy |
40 |
|
Styling |
60 |
|
Performance Total |
140 500 |
|
Target Cost by Function Group |
|
|
FUNCTION GROUP |
TARGET COST |
|
Chassis |
$1,400 |
|
Transmission |
280 |
|
Air conditioner |
100 |
|
Electrical system |
700 |
|
Other function groups |
4,520 |
|
Total |
$7,000 |
|
Quality Function Deployment (Correlation) Matrix |
|||||
|
|
Function Group |
||||
|
|
|
|
AIR |
ELECTRICAL |
OTHER FUNCTION |
|
CATEGORIES |
CHASSIS |
TRANSMISSION |
CONDITIONER |
SYSTEM |
GROUPS |
|
Safety |
0.3 |
0.1 |
|
0.1 |
0.5 |
|
Comfort and convenience |
0.3 |
|
0.1 |
0.1 |
0.5 |
|
Economy |
0.2 |
0.2 |
0.1 |
0.1 |
0.4 |
|
Styling |
0.1 |
|
|
|
0.9 |
|
Performance |
0.3 |
0.2 |
|
0.1 |
0.4 |
Required
(a) Prepare an exhibit showing percentage contributions of each function group to categories of customer requirements.
(b) Prepare a value index exhibit.
(c) Which function groups are candidates for cost reduction?