Tag Archives: Absorption Costing

Is Your Company’s P&L Report “Un-Lean”?

 Find out now. Take this quick quiz: I made an off-the-cuff remark a while back when I said the traditional P&L reports (or “Income Statements”) that are used by most companies in the US and around the world are “Un-Lean.” … Continue reading

Posted in Financial Accounting, Lean Accounting, Lean Culture, Management Accounting | Tagged , , , , , , , , , , | Leave a comment

ABSORPTION COSTING IS THE ENEMY OF LEAN. CHRYSLER AND GM PROVED IT IN 2008.

“Using absorption costing to monitor efficiency can lead companies to make poor production decisions,” says Ranjani Krishnan, professor of accounting at Michigan State. “A company that does this could seem to be growing less efficient when demand decreases. If a … Continue reading

Posted in Lean Accounting, Lean Management System, Management Accounting, Performance Measures | Tagged , , , , , , , , | 10 Comments