BE113-Management Accounting II

Part A

(i) Discuss the reasons why Vanessa formed such a team to manage the product and manufacturing process design to achieve target cost.

(ii) To what extent do you agree or disagree with the team in terms of their most potential areas for cost reduction? Discuss.s)

(iii)Where possible, illustrate your discussion of (i) and (ii) with the data from the case. 

Part B

With reference to the OMB’s case study, critically discuss the benefits and limitations of using target costing/pricing for the newly developed braking system. You should seek to support your discussion with relevant academic literature, and where appropriate, real-life cases or examples.