11Dealing with Standard Costing: Lean Inventory Valuation
Introduction
Inventory valuation is a necessary activity accounting must perform to maintain compliance with financial reporting standards. Standard costing is a method employed to value inventory, but as explained in the two previous chapters, it is a complex system with a great deal of detail, and it consumes a great deal of the time of many employees.
This chapter is going to explain what I consider one of the greatest improvement opportunities that exist in lean companies that use standard costing. It is the ability to “turn off standard costing” and use a more simplified, leaner method to value inventory for financial reporting purposes. The reason ...
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