Teaching Special Decisions In A Lean Accounting Environment

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Daniel Haskin


Lean Accounting, Cost Accounting, Special Decisions, Make-or-Buy Decisions, Special Orders, Just-in-Time Inventory, Target Costing


Lean accounting has become increasingly important as more and more companies adopt the lean enterprise model or some variation of it.  Cost and managerial accounting textbooks continue to use, almost exclusively, models based on standard overhead absorption, which if used in a lean environment will not accurately reflect the benefits from the movement to a lean enterprise and may distort the impact of the changes.  Because of these developments, accounting students should be exposed to lean accounting models beyond a brief introduction in their basic cost and management accounting courses.  This paper presents a model for teaching decision making in a lean company which uses value stream costing for such decisions as special orders and make-or-buy decisions. The use of these models in cost and managerial accounting classes will be of benefit to the future cost/managerial accountants.


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