Difference between kaizen costing and standard costing
Answers
Kaizen, also known as continuous improvement, is a long-term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality.Kaizen costing example. The general idea of kaizen costing is to determine target costs, design product and process to not exceed those costs, and finally - improve it to decrease costs.
Standard costing is the practice of substituting an expected cost for an actual cost in the accounting records, and then periodically recording variances showing the difference between the expected and actual costs.Management uses these costs in two different ways. First, they use them to plan out future production processes and increase efficiencies. By looking at the preset costs for operations, management can innovate new ways of producing products that don’t require the same procedures–thus, reducing cost.