JIT and the Role of Accounting
The president of Kelly Windows is an avid believer in JIT.Kelly Windows manufactures bay windows.The president wants no inventory or work-in-process on the floor at the end of each day.Windows are only manufactured after being ordered and throughput time is quick enough to complete most orders during the day of the order.The president is also trying to eliminate all non-value added activities.She considers accounting to be non-value added and would like to reduce accounting activities sharply if not completely.
As the controller,how can you defend the accounting activities performed by your department?

Question

Quizplus · Accepted Answer

The Answer is Solution to JIT and the Role of Accounting (10 minutes)
Accounting does not directly add value to the product or service purchased by the customer.Indirectly,however,the accounting function can reduce the cost of operations through better planning and control decisions.These reduced costs can be passed on to customers in the form of lower prices for products and services.
Another way to view the question is to recognize that accounting creates value by identifying non-value-added activities that can be eliminated.