Document Type : Research Paper
Abstract
The research aims to present a proposed vision for adopting one of the strategic cost management tools in improving the efficiency and effectiveness of the cost accounting system applied in Iraqi units under the unified accounting system to keep pace with developments in the business environment, which requires providing it with information that combines cost and decision-making structure to enhance the cost management strategy. The problem stems from criticism. Recorded according to the traditional cost system applied in the factory, one of whose products was chosen to represent pure milk prepared for the market, which is related to its failure to provide data in accordance with the requirements of strategic cost management and its adoption of cost-based pricing, which no longer supports the prices of the products remaining after the opening of the country, and making room for importing and providing products. To the customer at competitive prices, in addition to the high production costs for the Iraqi units, which significantly affected the local product, which requires searching for strategic costing techniques that would confront the market, especially the target costing technique because of its importance in adopting strategic cost management and to solve the problem. A hypothesis was formulated stating that there is a possibility of relying on the target costing technique to reduce the cost of the product, starting with studying market prices and ending with cost leadership to control costs. It was concluded that there is an urgent need to avoid the shortcomings of the traditional costing system with techniques that are compatible with the challenges of competition in the process of determining the target cost of the product, based on the expected selling price and the desired profit, with the aim of reducing its costs and achieving the targeted costs, which, if achieved, will achieve efficiency, effectiveness and economics in the work of the traditional costing system. This is through an integrated framework that goes beyond being a system that only determines the cost of products to a system with strategic cost management that supports decision-making.
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