The Impact of Applying Target Cost Technology on Cost Reduction in Industrial Companies

Abstract

This study aims to examine the role of target costing technique implementation on cost reduction from the perspective of employees in several industrial companies. The descriptive analytical approach was adopted to establish the theoretical framework. The researcher utilized a questionnaire survey as a data and information collection tool. The research sample consisted of 70 participants representing employees from 4 industrial companies in Sulaymaniyah Governorate, where 64 employees from the selected companies successfully completed the questionnaires. SPSS software and Microsoft Excel were employed to conduct the required statistical analyses to determine frequencies, arithmetic means, standard deviations, and correlation relationship tests. The study results yielded several conclusions, most notably the existence of a statistically significant correlation and impact at the level (α = 0.05) between the target costing variable and the cost reduction variable. The study reaches several recommendations, primarily that through implementing target costing technique, other innovative and novel techniques can be developed that contribute to cost reduction without affecting product quality. Additionally, there is a necessity to provide adequate training for employees in industrial companies across all departments, which contributes to enhancing their ability to determine target costs and monitor performance effectively.