3. In the new industrial environment, the efficacy of standard costing has been questioned, criticized and its demise predicted, due to several problems. Hence, the usefulness of standard costing is being challenged, and new approaches sought. One approach, pioneered by the Japanese, is to replace standard costing by target costing which focuses on managing costs during a product or services planning and design phase.

REQUIRED:

(a) Discuss THREE (3) reasons which are associated to the problems of using standard costing in the new industrial environment.

(b) Explain FOUR (4) main stages which involve in target costing approach.

(c) Describe THREE (3) differences between standard costing and target costing approach.