Lean accounting
Lean accounting replaces traditional overhead allocation and variance reporting with value-stream costing and plain-language performance measures. It is designed for manufacturing environments committed to lean principles.
FrameworkLean operations
See it move
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Traditional costing allocates overhead to each unit and reports efficiency variances against a standard, which can reward local output over system-wide flow. Lean accounting instead pools every cost within a value stream and reports it through box scores, plain-language summaries the shop floor can read directly. As lean operations shrink inventory toward zero, the valuation distortion absorption costing can create shrinks with it.
Where it fits
SubjectCost AccountingPeripheralTopicStrategic & Lean Cost ManagementPeripheral