Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen

Exercise 42

Lean manufacturing and lean accounting promise significant benefits to an organization. Yet, the initial effect of lean manufacturing is often an initial drop in profits reported on the financial statements.
Required:
1. Go to www.journalofaccountancy.com and search for articles on lean accounting. Using articles found in this search, answer the following questions:
a. Why do standard-costing practices no longer make sense for a lean organization?
b. If standard costing is replaced with a lean accounting approach, what problems might a firm then face?
2. Go to www.leanadvisors.com and identify companies that have implemented lean manufacturing. Answer the following questions:
a. What kind of benefits did manufacturing companies experience from implementing lean manufacturing?
b. Can lean approaches be applied to service organizations? If yes, describe a specific implementation for a service organization and the resulting benefits.