Impact of Target Costing and Activity Based Costing on Improving the Profitability of Spinning Mills in Coimbatore - Empirical study on Spinning Mills

Abstract

Rapid developments in Technology, change in customer expectations, shortening product life cycles and especially increasing global competition force the companies reach the targets of “low cost, short time and high quality†at the same time and the highest level possible. Therefore,  companies utilize the modern management accounting techniques in achieving these goals. One of the most important among these methods is “Target Costingâ€. Target Costing can boost the bottom line of the balance sheet. Activity Based Costing information is being used for Target Costing.  The objective of this thesis is to demonstrate the use of the Activity-Based Costing (ABC) approach together with the Target Costing philosophy in determining the optimal product-mix to improve the profitability of the Textile Spinning Mills in Coimbatore.