Kaizen Costing

Kaizen Costing is a system that involves continuous minimization of cost of producing a product as the organization progress. It involves continuous elimination of all activities which are not value adding to the final product.

Where does Kaizen Costing apply?

Kaizen Costing applies in cases where there are issues of less value addition activities. In other words activities which are ghost to actual production process. Kaizen costing fits well where there is re-designing of an existing product.

How does Kaizen Costing work?

Kaizen Costing entails controlling of costs in a whole process or stages in production. For instance, control of costs from the point of view of procurement, administration, inventory acquisition and transport charges.


About the Author - Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.