Definition of Kaizen Costing:
The objective of Kaizen costing is to reduce actual costs to manufacture a product below the standard cost.
Standard cost system generally aim to achieve the cost standards set by management while Kaizen costing systems are more concerned with reducing actual costs below standard costs.
What do you mean by Kaizen costing?
Kaizen costing is a cost reduction system. Yasuhiro Monden defines kaizen costing as “the maintenance of present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level.” The word kaizen is a Japanese word meaning continuous improvement.
What are the 5 elements of kaizen?
The foundation of the Kaizen method consists of 5 founding elements:
- personal discipline,
- improved morale,
- quality circles, and.
- suggestions for improvement.
Which of the following is the difference between Target Costing and Kaizen Costing?
Explain the difference between target costing and kaizen costing Target costing takes place during the pre-production planning phase for a new product. Kaizen focuses on making continuous, often small, but incremental cost improvements through improved purchasing and productivity, reduced wastage, etc.
What are kaizen principles?
Kaizen is a concept referring to business activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Kaizen also applies to processes, such as purchasing and logistics, that cross organizational boundaries into the supply chain.