FZ India Ltd. (FZIL) is an automobile manufacturer in India and a subsidiary of Japanese automobile and motorcycle manufacturer Fuji. It manufactures and sells a complete range of cars from the entry level to the hatchback to sedans and has a present market share of 27% of the Indian passenger car markets. FZIL uses a system of standard costing to set its budgets. Budgets are set semi-annually by the Finance department after the approval of the Board of Directors at FZIL. The Finance department prepares variance reports each month for review in the Board of Directors meeting, where actual performance is compared with the budgeted figures. Ms. Kiyoshi, group CEO of the Fuji is of the opinion that Kaizen costing method should be implemented as a system of planning and control in the FZIL.
Recommend key changes vital to FZIL's planning and control system to support the adoption of Kaizen Costing Concepts.