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what kaizen setup standard would be used at the beginning of each quarter 649510

ABM, KAIZEN COSTING

Daspart, Inc. supplies carburetors for a large automobile manufacturing company. The auto company has recently requested that Daspart decrease its delivery time. Daspart made a commitment to reduce the lead time for delivery from eight days to two days. To help achieve this goal, engineering and production workers had made the commitment to reduce time for the setup activity (other activities such as moving materials and rework were also being examined simultaneously). Current setup times were 12 hours.

Setup cost was $300 per setup hour. For the first quarter, engineering developed a new process design that it believed would reduce the setup time from 12 hours to eight hours. After implementing the design, the actual setup time dropped from 12 hours to nine hours. In the second quarter, production workers suggested a new setup procedure. Engineering gave the suggestion a positive evaluation, and they projected that the new approach would save an additional five hours of setup time. Setup labor was trained to perform the new setup procedures. The actual reduction in setup time based on the suggested changes was six hours.

Required:

1. What kaizen setup standard would be used at the beginning of each quarter?

2. Describe the kaizen subcycle using the two quarters of data provided by Daspart.

3. Describe the maintenance subcycle using the two quarters of data provided by Daspart.

4. How much non value added cost was eliminated by the end of two quarters? Discuss the role of kaizen costing in activity based management.

5. Explain why kaizen costing is compatible with activity based responsibility accounting while standard costing is compatible with financial based responsibility accounting.

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