HODL manufactures and sells a range of decorative products. It is not dominant in the market in which it operates and, as a result, it must accept the market price for each of its products. The company wants to ensure that it continues to compete and earn satisfactory profit at each stage throughout a products life cycle.

The CFO has mentioned Target Costing and Kaizen Costing as possible tools to assist, guide and improve its future performance.

Do you agree with the CFO? Provide motivation for your view by including how these costing techniques could work in this circumstance and hence whether theyre relevant.