Necessities and Determinants of the Application of Target Costing System in the Industrial Public Shareholding Companies in Jordan

Abstract

This study aimed to determine the necessities of applying the target costing approach in industrial public shareholding companies in Jordan and to identify thedifficulties restricting the use of this approach. To achieve the purpose of this study, a researcher-designed questionnaire was distributed to financial, production, and sales managers in 45 industrial public shareholding companies in Jordan. Each company was allocated three questionnaires. One sample T-test was used to test the hypothesis of the study. The empirical results showed the urgency of applying a target costing approach in industrial public shareholding companies in Jordan to provide flexibility in pricing policies, reducecosts, improve and planprofitability, keepup with the latest developments, narrowthe problems of designing, setthe lowest price, manage cost in a competitive environment, and reduce the rate of defective products. In addition, the possibility of applying target costing approach in industrial public shareholding companies in Jordan can be implemented through several requirements. The industrial public shareholding companies in Jordan have the desire to apply the target costing approach. However, difficulties were identified, and the results of the study revealed the most important determinants. These results are consistent with the findings of emerging market studies. The study is useful to authorities and organizations for identifying the necessities of applying the target costing approach. This approach paves the way for industrial public shareholding companies in Jordan to access the global market through a distinguished quality of production, high-quality productivity, low costs, and other benefits. The findings can assistin understanding the difficulties that restrict the use of modern productive systems.

Keywords: target costing approach, industrial public shareholding companies