Kaizen Costing

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  DEFINITION KAIZEN COSTING : A Japanese term for making improvements to a process through small, incremental amounts rather than through large innovations.  16-3 KAIZEN COSTING is the process of cost reduction during the manufacturing phase of a product. Improvement is the goal and responsibility of each worker.   Cost per product unit 12/31/x0 12/31/x1 Time Cost base for next year Actual cost reduction achieved Current year cost base Kaizen goal: cost reduction rate Actual cost performance of the current year Exh. 16-7  ã require the involvement and commitment of top management. ã Employees must be trained in the new processes, procedures and mindset that they must follow to be successful.
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