The Impact of Integration Between Target Costing (TC) and Value Engineering (VE) Methods on Reducing Manufacturing Costs (Field Study on Sudanese Food Industry)

Abstract

The study examined the impact of integration between target costing and value engineering on reducing manufacturing costs in Sudanese food industry. The study problem stemmed from the existence of many deficiencies in applying traditional costing techniques, which affect the determination and measurement of manufacturing costs, because pricing method in traditional costing system depends on adding a profit margin to manufacturing costs, and relying on this method may affect the competitiveness capabilities of these companies. Moreover, this method may not succeed in reducing manufacturing costs in the early design stages of a product.The study followed the historical method to review literature and the previous studies, which deal with the topic of the study, besides the descriptive and analytical method. A questionnaire was designed and distributed to the study sample, and the data were subjected after its collection to a statistical analysis through using the Statistical Package for Social Sciences Program (SPSS). The study concluded with a number of findings including the integration of target costing and value engineering contributed in reducing total manufacturing costs for Sudanese food industry. The study recommended applying the recent costing methods in the determination and measurement of costing such as target costing method and value engineering in a scientific manner, and training cost accountants on these methods