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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

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?

Jul 01 2020 View more View Less

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