Management accounting is a type of accounting intended for internal users. It is important because it provides managers, employees, controllers and owners with information about the company that serves as the foundation in making operational and managerial decisions. Over the years, countless methods have been devised to gather such information, and one of those methods is the target cost method. This method is based on the company's ability to adjust costs in order to obtain a market price that is predetermined by the market after adding the desired profit. The purpose of this paper is to study the method itself and analyze it on a real world example, more precisely to analyze examples from the Jan Spider company. The aim of this paper is to establish the advantages and disadvantages of the method and its application in the Croatian company. The paper consists of a theoretical and a practical part. In the theoretical part, the terms used to obtain the theoretical background are explained in order to make the practical part clearer later, because in the practical part the previously obtained theoretical knowledge is used in concrete examples based on Jan Spider d.o.o. The implementation of the practical part resulted in a better understanding of the target cost method. It is concluded that the target cost method allows companies to adjust the price to customer requirements, which is important because customer satisfaction should come first, given that their satisfaction and desire to buy allows the company to generate profit. The paper itself could benefit all interested parties who want to see how the target cost method is used in practice and can also benefit managers of start-ups who are not yet familiar with this method.