6th International Thematic Monograph – Modern Management Tools and Economy of Tourism Sector in Present Era

Application of the Concept of Target Costing in Hospitality
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Bojana Novićević Čečević    –   Faculty of Economics, University of Niš, Trg Kralja Aleksandra Ujedinitelja 11, Niš, Serbia
Ljilja Antić   –   Faculty of Economics, University of Niš, Trg Kralja Aleksandra Ujedinitelja 11, Niš, Serbia
Jovana Milenović    –   Faculty of Economics, University of Niš, Trg Kralja Aleksandra Ujedinitelja 11, Niš, Serbia
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DOI:    https://doi.org/10.31410/tmt.2021-2022.93
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Abstract:      In recent decades, the service sector has become a fast-grow­ing world economic activity, and hospitality organizations are a key ele­ment of the service sector. Providing high-quality services in this sector at lower prices than the competition is an important factor and the basic goal of companies’ business success. In order for hospitality organizations to achieve this goal, it is necessary to find an adequate way to calculate costs and determine the cost price of services provided. The application of mod­ern costing methods enables hospitality organizations to increase profits, increase labor productivity, shorten service delivery time and reduce costs. One of the concepts of cost management in a given business environment is target costing. The concept is focused on reducing costs, primarily in the product design phase to the target amount. The paper analyzes the possibil­ity of applying the modern concept – target costing in a hospitality company.

Keywords:   Target cost; Cost price; Service sector; Hospitality

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