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

Prepare the appropriate entries for december 31, A corporation acquired a t...

A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of d

How much will alan save or lose, Hale Company makes sets of wrenches. They ...

Hale Company makes sets of wrenches. They are trying to decide whether to continue to make the case the wrenches are sold in, or to outsource it to another company. The direct mate

Determine sales revenue and net income, Students will prepare a Comprehensi...

Students will prepare a Comprehensive Master Budget and Budgeted Financial Statements for Earrings Unlimited for the three-month period ending June 30. This includes: Sales Budg

Assumptions of break even analysis, ASSUMPTIONS OF BREAK EVEN ANALYSIS ...

ASSUMPTIONS OF BREAK EVEN ANALYSIS 1. Fixed costs for all time remain constant. 2. All costs are divided into fixed and variable costs. 3. Selling price will not alter de

Classification of cost, what is the meaning of classification of cost in re...

what is the meaning of classification of cost in relation to variability?

Determine the velocity impulse, Problem: A satellite is launched into Ear...

Problem: A satellite is launched into Earth orbit by a Delta II launch vehicle (LV).  The Delta LV's engines do not perform as expected, and at upper-stage burnout the satellite

Outstanding expenses, Expenses are usually recorded only while they are pai...

Expenses are usually recorded only while they are paid. The failure to record unpaid expenses in the accounts outcomes in an understatement of which expense and also an understatem

Calculate the maximum capital cost allowance, At the beginning of 2010, Mir...

At the beginning of 2010, Mirror Corporation, had undepreciated capital cost (UCC) of $1,575,000 in asset Class 38 with a CCA rate of 30%. On April 15, 2010, Mirror sold an asset t

Break-even analysis, Break-Even Analysis Break-even point is the volum...

Break-Even Analysis Break-even point is the volume of sales at that there is no loss or. Break-even charts graphically show the relationship of cost to profits and volume and

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