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1. Data can be obtained from central accounting data base carefully stocked form such a variety of sources as accounts payable, billing, bills of materials and inventory records.
2. In initial stages of product design, the cost accountant must make the best possible guesses regarding the cost of proposed designs.
3. The cost accountant may include the best estimate an additional estimate of the highest possible cost that will be encountered. This additional information lets management know whether there is a significant degree of risk that the project may not achieve its desired cost target.
4. Data can also be obtained from competitors information collected by the marketing staff or an outside research agency. This database contains information about the prices at which competitors are selling their products, as well as the prices of ancillary products and perhaps also the discounts given at various price points. It can also include market share data for individual products or by firm, the opinion of customers regarding the offerings of various companies, and the financial condition of competitors. This information is mostly used to determine the range of price points at which a company should sell its existing or anticipated products,
5. Sometimes information is compiled by a combined effort of the marketing and engineering staffs through a process called reverse engineering.This source can also serve as a data base for the project team.
6. Engineering staff also compiles their own cost data relating to different designs/components.This data is collected over the years and can be useful for target costing.
7. The final database available to the cost accounting member of a design team contains information regarding the previous quality, cost and on-time delivery performance of all key suppliers, as well as the production capacity of each one.
