Secondly, the implementation of target cost management should follow the following principles: (1) the principle of graded responsibility management. The target cost should be controlled by functional departments, which are divided into three levels of management structure: factory department, department or workshop and team. (2) The principle of controllability. The cost target issued by decomposition can be controlled in advance by the responsible department. (3) The principle of combining responsibility, right and benefit. In order to strengthen the rigidity of cost control, enterprises should combine cost control with the economic interests of personnel at all levels while giving corresponding rights to each responsible level of the unit, and implement the responsibility system of combining output, business volume, labor service quality, product quality and cost with the income of non-agricultural employees. (4) The principle of combining economy with technology. Make the business activities of the enterprise in the best state of economic and technological combination, and make the enterprise get the greatest benefit. (5) decision-making principles. After the target cost decision is made according to the decision-making procedure, the cost of all projects can be actually implemented. In addition, the implementation of target cost management will establish a reasonable and efficient organizational structure. Target cost management is a holistic and all-round management, and a reasonable organizational system must be established in order to coordinate the work of personnel at all levels and achieve the goal reliably. The institutional framework of target cost management is divided into three levels: (1) decision-making level. The factory department set up a leading group for target cost management, with the factory director as the group leader, other deputy factory directors and chief engineers, chief economists and financial leaders as deputy heads, forming a core decision-making layer, and other members of the group are the heads of various functional departments, forming a decision-making participation layer. The decision-making layer is responsible for reviewing and approving the enterprise's future cost target, annual total cost target and special budget project cost target. (2) Management organization layer. Its task is to be responsible for the organization, coordination, decomposition, analysis and assessment of target cost management. It is composed of functional departments or special persons in charge of the project, and the main personnel in charge of daily control of target cost in finance and technology, research institute and production department. Set up the daily organization of target cost management in the finance department. (3) the actual execution layer. By each team, department or cost management personnel, project leader to form the implementation organization layer, the implementation of target cost control. The executive operation layer is composed of employees, who are the people who realize the directness of cost management objectives.

In addition, the implementation of target cost management will follow certain procedures. (1) Forecast and formulation of target cost. Through information synthesis, according to the medium and long-term business strategy and plan of the enterprise, the future cost target budget document is compiled in two parts: medium and long-term and annual (presided over by the factory director). According to the market profit level, combined with the enterprise's production capacity and development planning, the annual profit target is determined according to the annual marketing plan and production schedule, the balance is calculated comprehensively, and the annual and period cost target total budget documents are compiled (presided over by the chief economist). Special decision-making projects and daily decision-making projects shall be predicted and analyzed by the sponsors on the cost and benefit of the projects, and the profit target and cost draft shall be formulated. (2) The cost of target decision. The daily decision-making procedure of target cost control shall be implemented in accordance with the Provisions on Improving the Audit of Financial Revenue and Expenditure and Several Provisions on Strengthening the Management of Fixed Assets. (3) Decomposition and implementation of target cost. Draft future cost and annual period cost targets shall be submitted to the target cost management leading group for approval, allocation and modification. Presided over the formulation of the horizontal decomposition of cost projects, from the chief economist to all departments in charge of management, and then determined the focus of target cost control according to the principle of importance, and then compiled the annual budget and quarterly budget in the form of long-term budget according to the principle of controllability. The financial department decomposed the target cost of related projects into various departments of the management organization and put it in place together, and finally the management organized the target decomposition and distributed it to the actual executive level. (4) Target cost report, analysis and revision. Regularly report, analyze, set goals and analyze the cost expert report of the system. The arrangement of monthly, quarterly and annual reports should be systematic and fixed, and special analysis reports should be issued. (5) Target cost inspection. According to the target cost management responsibility system, the chief economist organizes regular assessment of responsible departments and special assessments, and combines target cost accounting with financial accounting.