Standard costing and variance analysis using kaizen costing, Cost Accounting

Assignment Help:

Discuss how SD can use standard costing and variance analysis to prepare meaningful reports when using Kaizen Costing.

By the use of standard costing and variance analysis, from the Kaizen Costing is based on the concept of continuous small improvements to reduce costs then the original standard cost would no longer reflect the target which is achievable.  Consequently the measurement of performance against this target would be of limited usefulness.
 
In order to prepare meaningful reports of SD would need to determine the extent of the variances that have been caused by changes in the method of operations we used as a result of using the Kaizen Costing. These variances would be reported as planning variances & the remaining cost differences would be reported as operational variances.
 
Although the managers of SD will have been involved in the Kaizen process ,its an important that the variances between the target that the managers believed would now be achievable and the actual results are reported separately. Then the managers can consider whether these variances have arisen due to impact of operational factors or due to over ambitious revised targets. The variance b/w the original target and the new Kaizen target (the planning variance) measures the extent to which it is believed that the Kaizen techniques have reduced SD’s costs.


Related Discussions:- Standard costing and variance analysis using kaizen costing

Cost accountign, Hi, i need the solution manual for cost accounting manager...

Hi, i need the solution manual for cost accounting managerial emphasis 12 edition

Disadvantages of standard costing, Disadvantages of Standard Costing ...

Disadvantages of Standard Costing 1. The system of standard costing is very expensive to install : A lot of money is spent in studying output requirements in terms of materia

Job costing, XYZ Company is a family-owned bicycle manufacturing company lo...

XYZ Company is a family-owned bicycle manufacturing company located in Stow, Ohio. Until recently,it had maintained slow but steady growth in producing and marketing its only prod

Prepare the entry to assign factory labor to production, The gross earnings...

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

Manufacturing cost, Use a selected company or your current work environment...

Use a selected company or your current work environment to identify at least one cost or expense that would fit under each of the following categories: • Variable • Fixed • Mixed •

Evaluation of discount rates, Does it make sense for PP's management to use...

Does it make sense for PP's management to use so many discount rates in its evaluation? Explain. What additional information would you like to have to make a more informed decis

Differential analysis, West Industries is a highly decentralized corporatio...

West Industries is a highly decentralized corporation with independent operating divisions. Each division is evaluated and rewarded based on its total net income. One of the divisi

Marginal analysis, Marginal analysis finds to equalize the cost of producin...

Marginal analysis finds to equalize the cost of producing one more item (marginal costs) with the revenue gained from selling one more item (marginal revenue).

Cash budget - budgetary planning and control, Cash Budget - Budgetary Plann...

Cash Budget - Budgetary Planning and Control This can records the cash outflows and inflows that are expected to take place in respect of every functional budget. This may be

Traditional income statement, Traditional income statement: The DU Inn i...

Traditional income statement: The DU Inn is an 80-room hotel located on some mountaintop in Colorado. It has no bar or restaurant and is positioned as a mid-priced, good quality

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd