Using the Rasch Model to Measure Malaysian Companies’ Capabilities toward Target Costing Implementation

Sharaf-Addin, Hussein H.; Omar, Normah; Sulaiman, Shahril Irwan

doi:10.5539/ass.v11n5p33

Cited by 2 publications

(1 citation statement)

References 21 publications

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“…Target costing is a critical force for cost reduction (Juwita & Satria, 2017). Malue (2013) claims that target costing is the process of estimating a product's expected cost based on a competitive pricing in order for the product to make the anticipated profit (Ax et al, 2008;Sharaf-Addin et al, 2018). Target costing takes into account a product or service's total cost across its entire life cycle and works to lower that cost.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

Masadeh¹,

Jrairah²,

Almasria³

2023

J. Professional Business Review

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Purpose: This study aimed to examine the effect of applying the target cost approach on product structure in industrial public shareholding companies in Jordan. Theoretical framework: The purpose of applying target cost approach on products' structure (products pricing, development and quality) and it is ability to reduce costs and improvements that can be obtained in the process of applying target cost approach. Numerous research related to applying target cost approach have been conducted, with the majority focusing on large companies. However, Jordanian industrial companies have limitations compared to large companies. Repairability is considered for cost optimization. Design/methodology/approach: The study uses the analytical approach through the study tool (Questionnaire). The study population consisted of Jordanian industrial companies, which reached (56) companies in 2022, according to the monthly statistical periodical of the Amman Stock Exchange (ASE). A sample of (42) companies was selected, and the questionnaire was distributed to (The Financial Manager, Production Manager, Sales Manager, and Accountant) for each company. The number of questionnaires approved for statistical analysis was (130), representing (77%) of the distributed questionnaires. This study uses different tests to analyze the data and extract results related to the statistical methods, i.e., the descriptive statistic, Cronbach's Alpha Equation, Pearson's Correlation Coefficient, and Simple Linear Regression Analysis. Findings: The study found that there is a strong relationship between the target cost approach and the product structure, with the existence of a statistically-significant effect, whereas the correlation coefficient value reached (0.808); thus, the target cost approach contributes to developing products and improving profitability through focusing on the analysis process of the possibilities of product success, before allocating the productive resources thereof. It has also contributed to reducing the cost during the production stages from its beginning while maintaining the products' quality, and it also leads to increasing sales volume through the pricing mechanism based on the target cost. Through the answers of the study sample individuals, it is pointed out that the arithmetic mean of the target cost approach is high, as it reached (3.77) and the standard deviation is (0.57), as well as the arithmetic means of the products' structure is high, as the pricing element came in the first class, with arithmetic means of (3.86) and standard deviation of (0.51), then the development element came in the second class, with arithmetic means of (3.78) and standard deviation of (0.58), whereas the quality element came in the third-class, with arithmetic means of (3.75) and standard deviation of (0.53). The results of the regression analysis also indicate that there is a statistically significant effect of the target cost approach on the quality of products, with (R²) (46.3%) which represents the proportion of explanation in the variance of the dependent variable. The findings of the study highlighted that there is a statistically-significant effect of the target cost approach in product development with (R²) with (37.5%) which indicates that the target cost explains (37.5%) of the difference in the product development. The results also indicate that there is a statistically significant effect of the target cost approach in product pricing with R) value indicating a high-strength correlation between the target cost approach and product pricing, which is (0.812). Research Practical implications: It is necessary to pay attention to qualifying workers by developing programs that deal profoundly with the approachs and modern systems of costs, such as the target cost system and the value chain as these approachs and accounting systems will be intensively adopted in the future for their outstanding role in developing product performance, Pricing and improving its quality. Originality/value: The study recommended that it is necessary to develop successful products and price them based on the target cost by balancing the company's ability and customers' needs, as well as using methods that lead to consistency and harmony between products' quality and customers' expectations. The study also recommended focusing on qualifying workers by developing programs that profoundly tackle the approaches and modern systems of costs, such as the target costing system

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Section: Introductionmentioning

confidence: 99%

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

Masadeh¹,

Jrairah²,

Almasria³

2023

J. Professional Business Review

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The effect of the application of balanced performance measurement dimensions in strategic decisions in government universities

Shaheen

2023

CGOBR

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A balanced scorecard (BSC) with strategic decisions plays a vital role in achieving the effectiveness of business organizations. However, this paper aims to determine the impact of implementing the dimensions of the BSC on strategic decision-making in Jordanian universities. The study population included all Jordanian universities, while the sample consisted of 218 respondents from all managers working at administrative levels. The research concluded that there is a statistically significant effect on the dimensions of the BSC with its four axes (the financial axis, the beneficiaries’ axis (students, the local community), the growth and learning axis, and the internal operations axis) in making strategic decisions in Jordanian universities, where Al-Jubouri (2018), Tomizh et al. (2022) and Mazzuto et al. (2022) supported this finding. It is recommended to apply the BSC axes correctly and accurately during application in a way that clearly and comprehensively improves the strategic decision-making process.

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Using the Rasch Model to Measure Malaysian Companies’ Capabilities toward Target Costing Implementation

Cited by 2 publications

References 21 publications

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

The Impact of Applying the Target Cost Approach on Products' Structure (Products Pricing, Development and Quality)

The effect of the application of balanced performance measurement dimensions in strategic decisions in government universities

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