What is Kaizen costing?
Understand the Problem
The question is asking for the definition of Kaizen costing. It presents four options, and you need to identify the one that accurately describes what Kaizen costing is.
Answer
Kaizen costing reduces costs during production through continuous improvement.
Kaizen costing is a cost reduction strategy that promotes continuous improvement during the production phase. It aims to lower costs by eliminating waste and improving efficiency in ongoing processes and activities.
Answer for screen readers
Kaizen costing is a cost reduction strategy that promotes continuous improvement during the production phase. It aims to lower costs by eliminating waste and improving efficiency in ongoing processes and activities.
More Information
Kaizen is Japanese for 'improvement'. Kaizen costing is usually implemented after a product's design and initial production stages.
Tips
A common mistake is to think Kaizen costing is a one-time cost reduction. It focuses on small, incremental improvements over time.
Sources
- Kaizen Costing - What Is It, Types, Examples, 5s Principles - wallstreetmojo.com
- Kaizen costing - Wikipedia - en.wikipedia.org
- Kaizen costing definition - AccountingTools - accountingtools.com
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