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

Calculate the inventory turnover ratio, The following information is availa...

The following information is available for the automotive division of Ford Motor Company for 2009.  The company uses the LIFO inventory method.

Use account analysis to determine fixed cost, Reef Office Supplies is inter...

Reef Office Supplies is interested in estimating the cost involved in hiring new employees. The following information is available regarding the costs of operating the Human Resour

Process accounts, What is the easiest of calculate equivalents before produ...

What is the easiest of calculate equivalents before producing a process account 2

Prepare the capital accounts, Shirley and Ken are in partnership, trading i...

Shirley and Ken are in partnership, trading in the construction industry. The year end for the partnership business is 30 June. You are the Assistant Accountant and have been as

Long - term capital loss, The Smiths have a long-term capital loss carryove...

The Smiths have a long-term capital loss carryover of $10,000 from 2010. On May 9, 2007, David's uncle, Joe, gave him the family antique gun collection. Based on family records

Find out the memorandum reconciliation account, Find Out the Memorandum Rec...

Find Out the Memorandum Reconciliation Account The givens are the final accounts of a company for the year ending on date 31st December 1999. Manufacturing Trading Loss and Pr

Relevant costs, What are investment appraisal methods when opening a new pr...

What are investment appraisal methods when opening a new project?

Maginal costing.., fixed expenses are incurred equally in the two half year...

fixed expenses are incurred equally in the two half year periods,calculate

Difference between cost accounting and financial accounting, The difference...

The difference among "cost accounting" and "financial accounting are terms demote to the accounting techniques used internally by a company's management to explain the costs of run

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