Traditional costing systems often commit the cardinal sin of overproduction in a lean production company if managers are:
A) Ordering excess inventory, to achieve quantity discounts and favorable prices
B) Refusing to halt production to determine the cause of a quality problem, in order to avoid having idle employees and equipment
C) Trying to obtain lower fixed costs per unit under absorption
D) All of the above

Question

Quizplus · Accepted Answer

Traditional costing systems such as absorption and standard costing systems are ineffective in a lean manufacturing environment because they do not focus on cost efficiency and quality.

Traditional Costing Systems Often Commit the Cardinal Sin of Overproduction