Target costing: First and second comings

Abstract

Contrary to the conventional wisdom that target costing (TC) was a 1960s' Japanese innovation, it is argued that the same concept, albeit then labelled 'product tailoring', first appeared in the 1950s' Anglophone managerial-economics literature in works linked to economist-consultant Joel Dean. These sources describe a range of North American applications of TC which clearly predate Japanese implementations. It is further argued that in the specifically accounting literature, Gordon Shillinglaw (1967) - a one-time employee of Dean - provided the first description of the TC concept. To support these propositions, the post-1990 TC literature is analysed to determine the key characteristics of ..