ABSTRACT
Toyota Motor Corporation starts as a subsidiary of the Toyoda Automatic Loom Works, Ltd. In 1993, Toyota Motor Corporation was Japan's largest automobile company. Many major manufacturers in Japan use target costing, the system used at Toyota Motor Corporation is the oldest and considered by many the most technically advanced. The primary use of target costing was to bring the target cost and the estimated cost of a product into line by better specification and design. Toyota set its cost planning goals and set out to achieve those goals through aggressive design changes. Cost planning could begin even before for the blueprints first test model were drawn. Second, estimating the total difference instead of the total cost tended to be less troublesome and more accurate, and finally, it helped the related divisions understand cost fluctuations. Profit targets for the life of the new model were calculated as differences between estimates and targets.
