This presentation is part of: F30-2 (2007) Emerging Trends in Finance and Financial Reporting in Central and Eastern Europe - I

A Benefit of New Costing Methods for Firm Management

Bohuslava Knapova, Ph.D., Department of Management Accounting, University of Economics Prague, W. Churchill Square 4, Prague 3, 13067, Czech Republic

Paper deals with new costing methods, which belong to problems of the output oriented management and are applied in the long-term (strategic) management of Czech companies. Benefit of these new costing methods consists in the orientation on a customer, in the management of costs during the all life cycle of the new output (product or service) and in the taking account of changes of costs and prices, including costs on the research and development and in the effort to emphasize attributes, costs, price of the introduced product or service and the possibility of the realization of the final product on the market. The life cycle costing judges costs on the product for all its life cycle, including costs on: the research and development, the introducing of the production, marketing costs and costs, which are connected with the finishing of the production; it respects also changes of prices during the life cycle in the evaluation of the effectiveness of the new product. Target costing is used in before-production stages and its task is to reach such costs in the period before the beginning of the production of a new or innovated product, when the required profit will be secured. Mentioned methods comprise the new tendency, which is typical for the output oriented management both under conditions of existing great corporations and small and middle-size firms.