A Study on Impact of Target Costing on Profitability of Selected Automobile Companies in India

Mr. Harish V. B.; Dr. Sadyojathappa S.

doi:https://doi.org/10.17492/jpi.mudra.v10i1.1012302

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A Study on Impact of Target Costing on Profitability of Selected Automobile Companies in India

Harish V. B., Sadyojathappa S.

Vol 10 , Issue 1 , January - June 2023 | Pages: 23-40 | Research Paper

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https://doi.org/10.17492/jpi.mudra.v10i1.1012302

Published Online: June 03, 2023

Author Details ( * ) denotes Corresponding author

1. * Harish V. B., Research scholar, commerce , Vijayanagara Sri Krishnadevaraya University, Ballari, Karnataka, India (harishvb59@gmail.com)

2. Sadyojathappa S., Associate Professor , commerce, Vijayanagara Sri Krishnadevaraya University, Ballari, Karnataka, India (dr_jathappa@yahoo.co.in)

Manufacturing firms must remain focused on adopting technology and processes rather than observing competition between rival firms. Better cost accounting practices must be adopted by businesses in order to reduce the cost of goods and services and to develop a successful automobile industry in India. This study looks into the Target Costing (TC) implementation process in Indian automobile industry. Target costing was used as a dependent variable in this study, whereas profitability, net tangible assets (NTA), EPS, and return on assets were used as independent variables. The study used a convenience sample of the top five Indian automobile companies listed on the BSE, and panel data from the years 2012–13 to 2021–22 was used. The descriptive statistical analysis and method of Pearson’s Correlation was used to analyse the data. According to Pearson’s correlation results, there is a negative association between target costs and profitability.

Keywords

Target costing; Application; Automobile industry; India

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