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Just-In-Time Changes To Manufacturing Cost Management Systems
Domestic manufacturers are experiencing increasingly stiff competition from world-class manufacturers that satisfy customer needs by exceeding current commercial standards for quality, flexibility, service and reliability while remaining cost competitive. One reason for this is the century-old practice of using cost accounting information to manage business performance. Most cost accounting systems do not effectively report on or monitor competitive advantage; nor do they provide reliable product cost information. Today's manufacturing cost accounting systems restrict management's ability to effectively compete with world-class manufacturing organizations.
In particular, the following traditional cost accounting practices need to be carefully evaluated for their appropriateness to today's manufacturing environment:
* Performance measures; * Direct labor reporting; * Overhead allocation methods; and * Capital investment analysis and