Under kaizen costing, accountants forecast
A) Declining prices and establish cost reduction goals to maintain a desired profit margin
B) Cost reduction goals and desired profit margins, then adjust prices accordingly
C) Declining profit margins and establish revenue and cost goals to meet them
D) Increasing profit margins and establish revenue and cost goals to meet them

Question

Quizplus · Accepted Answer

Under kaizen costing, accountants forecast declining prices and establish cost reduction goals to maintain a desired profit margin. This approach focuses on continuous improvement in processes and cost reduction through small, gradual improvements rather than large, one-time cost savings. As such, cost reduction goals are established beforehand to maintain the desired profit margin even if prices decline.

Under Kaizen Costing, Accountants Forecast