Managerial Accounting Assignment: Costing Techniques Reflection

This report provides a comprehensive reflection on managerial accounting, specifically focusing on standard costing and target costing techniques. The student reviewed two peer-reviewed journal articles, one examining the application of standard costing in an Irish manufacturing company (Engineering Limited) and another exploring the relevance of target costing in Handan Iron and Steel Company in China. The reflection details the student's learning process, including challenges in adapting to new perspectives on costing methods. The report highlights the practical application of these techniques, the evolution of the student's understanding, and the relevance of both standard and target costing in today's business environment. Standard costing is presented as a traditional yet still valuable tool for cost control and decision-making, while target costing is emphasized as a proactive cost management approach, particularly crucial in competitive global markets. The report concludes by outlining the key steps involved in target costing and emphasizing its effectiveness in product pricing strategies.

Running Head: MANAGERIAL ACCOUNTING
MANAGERIAL ACCOUNTING
Name of the Student
Name of the University
Author Note

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Table of Contents
1)................................................................................................................................................2
Reflection of Two Peer Reviewed Journal.................................................................................2
2)................................................................................................................................................3
Reflection on Experience...........................................................................................................3
3)................................................................................................................................................4
Reflection on Relevance of Two Costing Techniques to Today’s Business.............................4
Bibliography...............................................................................................................................6

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1)
Reflection of Two Peer Reviewed Journal
I have reviewed two peer reviewed journal on the usage of standard costing and target
costing by the real life company. During the study, the things that went well was clear and
high level of understanding about the topic, both theoretically and practically. While going
through the article, things that does not go as planned was that earlier I was having only
theoretical knowledge of standard and target costing, but once I started reviewing the article
about real life company and its application of the two costing methods my perception about it
has changed completely. The difficulties I addressed in learning about the methods of costing
was the change in perception about the topic. The knowledge that I was having earlier was
entirely changed once I started studying about the application of costing techniques in real-
life Company.
The major purpose of article was conducting study on standard costing usage in Irish
manufacturing company. In the case study, the company selected was Engineering Limited,
which was involved in the manufacturing of electrical products. The business nature of
company is having extremely structure of stable costing and they are unlikely to implement
complex technique as part of the business. The decrease in span of production cycle and
increasing competitive nature of environment in which business operates results in the
increased importance of the standard costing practice. Despite of the changes and increase on
the entity’s demands relating to producing reports, standard costing role as part of company
has remained unchanged. Therefore, I have learned that extremely conservative costing
methods such as standard costing can adjust comfortably to the new changes occurring in
outside environment of business without disturbing existing structure as well as the way
business operates.

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The second article selected was for understanding the relevance of target costing in
modern day business. The real life company selected as part of the study was Handan Iron
and Steel Company, which was prominent 100 enterprises that was owned by China. The
company suspended various projects of infrastructure and various companies was founding
themselves in less profitable situation than what it intended for, because of increasing
inflation in the China. As the result of this, company adopted target costing as the part of
their business process. Hence, from this article I have learned that the introduction of various
measures by company has helped them for controlling costing and helped in dealing with
worldwide competition.
2)
Reflection on Experience
The experience I have with this research, was great. I have come to know about
various aspects of the subject and topic, while doing the research. The enjoyable part of the
research was leaning about real application of target costing and standard costing in the real-
life company. However, the difficult part was that when my perception was changed about
the subject. I felt great level of difficulty in researched on the case study provided in the
article. Further, I have gained great level of insights on the two costing methods. I have
learned that standard costing is traditional techniques of costing, however, target costing is
considered to be more of the technique of cost management. I get to know that standard
costing suggests maximum possible entity’s achievements, in case, if it optimally functions in
conditions available to it. On the other hand, target costing is having more goal that is
intended by company for achieving with the help of adjusting resources available and
allocation of it in the efficient manner. In addition to it, I have learned that standard costing
considers only internal resources and it is more retrospective costing, however, target costing,

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is more planning activity based and it takes market conditions and consumer’s taste and
preferences into the consideration. Moreover, while gaining the insights, there were no such
challenges that I have experienced.
3)
Reflection on Relevance of Two Costing Techniques to Today’s Business
There is great relevance of standing and target costing techniques in the today’s
businesses. I have gained the insights on these two costing methods. Further, I have learned
that both standard costing and target costing are relevant in the today’s business environment.
Standard costing is the traditional method of cost accounting and still it is important aid to the
management for controlling the cost and making various managerial decisions. It helps in
providing adequate assistance in areas of constructing strategy and the operational
management. It is applied in both the service and manufacturing sector all through the world.
In modern environment of manufacturing, survival of the standard costing has proved its
superiority as well as usefulness. Hence, I can say that standard costing is the useful tool in
management hand for controlling costs, making the decisions and for the purpose of
evaluating performances.
Further, I have learned that target costing is most effective methods in the
management of cost. It is because of globalization of the markets and increasing
development, the requirement of considering new cost management techniques is felt more
than ever. This is most widely used costing method. It begins with the identification of needs
of customers and estimating acceptable price of sale for product. There is establishment of
full product’s cost for earning estimated profit. It helps in driving strategy of product
development, which focusses the team design on ultimate customer as well as on market’s
real opportunity. In addition, I have learned that there are five steps included in the target

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costing, which includes establishing long-term profit and sales objectives, products mix
development, identifying target selling price for each of the product, identification of profit
margin for each of the product and calculation of allowable cost for each of the product.
Therefore, after learning about target costing, I can say that the approaches of target costing
helps in achieving cost of product when determining price based on the competition.

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Bibliography
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hyper-relevant advertising on moving objects. U.S. Patent 9,183,572.
Clifton, M.B., Townsend, W.P., Bird, H.M. and Albano, R.E., 2019. Target costing: market
driven product design. CRC Press.
Iafa.ie. 2020. [Online] Available at: https://iafa.ie/wp-content/uploads/2017/12/AFGR-
201.pdf [Accessed 24 Jan. 2020].
Maskell, B.H., Baggaley, B. and Grasso, L., 2017. Practical lean accounting: a proven
system for measuring and managing the lean enterprise. Productivity Press.
Melnyk, S.A., Bititci, U., Platts, K., Tobias, J. and Andersen, B., 2014. Is performance
measurement and management fit for the future?. Management Accounting Research, 25(2),
pp.173-186.
Pdfs.semanticscholar.org. 2020. [Online] Available at:
https://pdfs.semanticscholar.org/1f96/a2d5cfb63a0d798be64cdf68bb8247dbfb29.pdf
[Accessed 24 Jan. 2020].
Russell-Smith, S.V., Lepech, M.D., Fruchter, R. and Meyer, Y.B., 2015. Sustainable target
value design: integrating life cycle assessment and target value design to improve building
energy and environmental performance. Journal of Cleaner Production, 88, pp.43-51.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.