What is target cost in SAP PLM-PLC - Product Lifecycle Costing?

SAP Term: target cost

• Component: PLM-PLC

• Component Name: Product Lifecycle Costing

• Description: Target set for the cost of an item. You can compare the target cost to the total cost to see if your target is met.

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• Key Concepts: 
  Target cost is a concept used in Product Lifecycle Costing (PLC) within SAP's Product Lifecycle Management (PLM) module. It is the cost that a company aims to achieve for a product or service. This cost is determined by taking into account the cost of materials, labor, overhead, and other factors. The target cost is then compared to the actual cost of producing the product or service to determine if the company is meeting its goals. 
  
  How to use it: 
  Target cost can be used to help companies set goals for their products or services. Companies can use target cost to determine how much they should be spending on materials, labor, overhead, and other factors in order to achieve their desired cost. Companies can also use target cost to compare their actual costs to their desired costs in order to determine if they are meeting their goals. 
  
  Tips & Tricks: 
  When setting a target cost, it is important to consider all of the factors that go into producing a product or service. This includes materials, labor, overhead, and other factors. It is also important to consider any potential changes in the market that could affect the cost of producing the product or service. 
  
  Related Information: 
  Target cost is related to other concepts such as budgeting and forecasting. Budgeting involves setting a budget for a product or service based on expected costs and revenues. Forecasting involves predicting future costs and revenues based on current trends and market conditions. Both of these concepts are important for companies when setting target costs for their products or services.