PB is a car production company. PB uses a system of standard costing to set its budgets.

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PB is a car production company. PB uses a system of standard costing to set its budgets. Budgets are set annually by the Finance Department and approved by the Board of Directors of PB. The Finance Department prepares variance reports each month for review at the Board of Directors’ meeting, where actual performance is monitored by comparison to budgeted figures. 

A new Finance Director has recently joined PB from a competitor organisation where there was a Total Quality Management culture. The new Finance Director of PB is keen to discuss the implementation of kaizen costing at the next meeting of the Board of Directors. The new Finance Director would like to review the current planning and control system at PB with a view to making changes so that it could support kaizen costing concepts. 


Required

Explain THREE changes required to PB’s planning and control system to support the adoption of kaizen costing concepts.

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Related Book For  book-img-for-question

Management And Cost Accounting

ISBN: 9781292232669

7th Edition

Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan

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